Question

1. Bad Debt Expense

   Green Manufacturing had $152,000 of Accounts Receivable outstanding at the end of the year. $122,000 of those receivables have been outstanding for less than 30 days. The remaining $30,000 of those receivables have been outstanding for more than 30 days. Green uses the Aging of Receivables method and estimates that 2% of receivables outstanding for less than 30 days and 4% of receivables outstanding for more than 30 days will not be collected. Green wrote off $2,200 of receivables during the current year.

   If the beginning balance in Green's Allowance for Doubtful Accounts was a credit of $4,600, how much Bad Debt Expense will Green record this year?

   You must show you work in order to get any credit for this problem.

   Bad Debt Expense

QUESTION 22

1. Plant Assets

   Crown Construction purchased a new dump truck for $42,000 cash on January 1, 20Y3. The dump truck has an estimated useful life of 10 years and a salvage value of $11,500. Crown estimates it will operate the dump truck for 12,200 hours during its useful life. Crown used the dump truck 1,040 hours during 20Y3.

   How much depreciation expense will Crown record in 20Y3 using each of the depreciation methods listed below? NOTE: Round your final answers to the nearest whole dollar. Include appropriate commas and no dollar signs (e.g. 1,000). You must show you work in order to get any credit for this problem.

   Straight-Line Depreciation Expense for 20Y3

   Double-Declining Balance Depreciation Expense for 20Y3  

   Units of Activity Depreciation Expense for 20Y3

Answer 1

Bad Debt Expense

	Amount	*	Percentage estimated uncollectible	=	Estimated amount
Less than 30 days	$122,000	*	2%	=	$2,440
More than 30 days	30,000	*	4%	=	1,200
Total					$3,640

Bad debts expense= Estimated ending balance+Wrote off-Beginning balance of allowance for doubtful accounts

= $3,640+2,200-4,600= $1,240

Bad debts expense

1,240

Plant Assets

Straight line method

Depreciation expense= (Cost-Salvage value)/Estimated useful life

= ($42,000-11,500)/10= 3,050

Double-declining-balance method

Depreciation rate= 100/10*2= 20%

Depreciation expense for 20Y3= Cost*Depreciation rate

= $42,000*20%= 8,400

Units of activity method

Depreciation rate= (Cost-Salvage value)/Estimated useful hours

= $(42,000-11,500)/12,200= $2.5 per hour

Depreciation expense= 1,040*$2.5= 2,600

Straight-Line Depreciation Expense for 20Y3	3,050
Double-Declining Balance Depreciation Expense for 20Y3	8,400
Units of Activity Depreciation Expense for 20Y3	2,600

NOTE:- For any problem regarding the answer please ask in the comment section.