Question

McNealy Corporation had a beginning and ending accounts receivable balance of $50,000 and $106,000, respectively. During...

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

Homework Answers

Answer #1

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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