Use the following selected transactions to answer Problem 35.

1. Land worth $15,000 is acquired by issuing a 2-year note payable.

2. $12,000 cash is received from stockholders to finance the entity.

3. $10,000 of merchandise inventory is acquired on account.

4. $9,000 of equipment is acquired by paying cash.

5. $7,000 of credit sales are made to customers.

6. $6,500 owed various suppliers of merchandise is paid.

7. $6,000 of cash sales are made to customers.

8. $5,000 of cash is collected on amounts owed by customers.

9. Equipment with a cost of $4,000 and accumulated depreciation of $1,000 is sold

for $2,500.

10. $3,500 of dividends are paid to stockholders.

11. $2,500 of cash is received from customers before delivery.

12. $1,500 of cash is paid for interest.

35. Which of these answers best reflects the effect of the preceding transactions on

Vogel Corporations Statement of Cash Flows?

Operating Investing Financing

a. +$5,500 -$ 6,500 +$ 8,500

b. +$5,500 -$21,500 +$23,500

c. +$2,500 -$ 6,500 +$ 8,500

d. +$2,500 -$21,500 +$23,500

e. +$5,000 -$ 6,500 +$ 8,500

Use the information below to answer Problems 36 and 37.

36. The following information pertains to Coulter Companys accounts receivable

at December 31, Year 2:

Days Estimated

Outstanding Amount Uncollectible

0 - 60 $240,000 1%

61 120 180,000 2%

Over 120 200,000 6%

$620,000

During Year 2, Coulter wrote off $14,000 in receivables and recovered $8,000 that

was written off in prior years. Its December 31, Year 1 Allowance for Bad Debts

account had a $4,000 credit balance. Using the accounts receivable aging schedule

on the previous page, what amount should Coulter report for the Allowance for

Bad Debts account balance at December 31, Year 2?

a. $4,000

b. $16,000

c. $18,000

d. $20,000

e. $36,000

37. Using the information introduced in problem 36, what is the correct amount of the

adjusting entry that debits Bad Debt Expense and credits Allowance for Bad Debts?

a. $8,000

b. $14,000

c. $18,000

d. $20,000

e. $28,000

38. Sang-Kyu Lee Corporation estimates its bad debt expense to be 2% of credit sales.

Lees credit sales for the year were $1,000,000. During the year, Lee wrote off

$18,000 of uncollectible accounts. Lees Allowance for Bad Debts account had a

$15,000 balance on January 1. In its current year income statement, what amount

should Lee report as bad debt expense?

a. $15,000

b. $17,000

c. $18,000

d. $20,000

e. $23,000