The term "receivables" includes all

a$.$ cash to be paid to debtors

b$.$ merchandise to be collected from individuals or companies

c$.$ money claims against other entities

d$.$ cash to be paid to creditors

An account becomes uncollectible

a$.$ at the end of the fiscal year

b$.$ when a discount is availed on notes receivable

c$.$ when an account receivable is converted into a note receivable

d$.$ There is no general rule for when an account becomes uncollectible.

At the end of the current year, Accounts Receivable has a balance of $$550,000$; Allowance for Doubtful Accounts has a credit balance of $$5,500$; and sales for the year total $$2,500,000.$ An analysis of receivables estimates uncollectible receivables as $$25,000.$

a$.$ Determine the amount of the adjusting entry for bad debt expense. Uncollectible receivables $-$ Allowance for doubtful accounts

$

b$.$ Determine the adjusted balances of Accounts

Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

Adjusted Balance

Accounts Receivable

$9$

Allowance for Doubtful Accounts

Bad Debt Expense

Allowance for doubtful accounts $=$ Allowance for doubtful accounts credit balance $+$ bad debt expense

c$.$ Determine the net realizable value of accounts receivable. Accounts receivable $-$ uncollectable receivables $=$ net realizable value $

$11.$ An estimate of the amount for which an asset can be sold at the end of its useful life is called residual value.

True or False

$12.$ Once the useful life of a depreciable asset has been estimated and the amount to be depreciated each year has been determined, the amounts cannot be changed.

True or False

$13.$ The acquisition of a new machine with a purchase price of $$109,000,$ transportation costs of $$12,000,$ installation costs of $$5,000,$ and special acquisition fees of $$6,000,$ would be journalized with a debit to the asset account for

a$.$ $$121,000$

b$.$ $$132,000$

c$.$ $$114,000$

d$.$ $$126,000$

purchase price $+$ transportation cost $+$ installation costs $+$ acquisitions fees