1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
A. Bad Debts Expense ……………. ……………. $15,000
Allowances for Doubtful Accounts ……………. ……………. $15,000
B. Bad Debts Expense ……………. ……………. $12,000
Allowances for Doubtful Accounts ……………. ……………. $12,000
C. Bad Debts Expense ……………. ……………. $12,000
Accounts Receivable ……………. ……………. …………….. $12,000
D. Bad Debts Expense ……………. ……………. $15,000
Accounts Receivable ……………. ……………. …………….. $15,000
2) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period?
A. $15,000
B. $12,000
C. $18,000
D. $8,000
3) Intangible assets
A. should be reported under the heading Property, Plant, and Equipment
B. should be reported as a separate classification on the balance sheet
C. should be reported as Current Assets on the balance sheet
D. are not reported on the balance sheet because they lack physical substance
4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that
A. must be generated internally
B. are depletable natural resources
C. do not have physical substance
D. have been exchanged at a gain
5) The book value of an asset is equal to the
A. asset’s market value less its historic cost
B. blue book value relied on by secondary markets
C. replacement cost of the asset
D. asset’s cost less accumulated depreciation
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