McNealy Corporation had a beginning and ending accounts receivable balance of $50,000 and $106,000, respectively. During the year, Mulder had credit sales of $68,000 and write-offs of $14,000. If McNealy estimates bad debt expense at 5% of credit sales, what is the bad debt expense for 2019?
Select one: a. $14,000 b. $2,500 c. $3,400 d. $5,300
2.On March 1, 2019 Suissie Company purchased a machine for $600,000. The machine was expected to have a 10-year useful life and $120,000 salvage value. If the company uses the double declining balance depreciation method, what is the correct depreciation expense for 2019?
Select one: a. $96,000 b. $120,000 c. $100,000 d. $80,000
1.
Credit sales = 68,000
Write offs = 14,000
Bad debts expenses of the month is 5% of credit sales
Bad debts expense of 2019 = 68,000*5%
Bad debts expense of 2019 = $3,400
Option C. $3,400
2.
Cost of asset purchase on March 1 = $600,000
Salvage value = 120,000
Usefull life = 10 years
Double Declining depreciation rate (100/10)*2 = 20%
Depreciation expence of 2019 for 10 months(March to December)
= (600,000*20%)*10/12
= 120,000*10/12
= $100,000
Option c. $100,000
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