Question 1 - Alpha Company used the percentage of sales method, with an historical rate of 2% for determining their bad debt expense. During 2016, sales were $1,600,000, and the January 1 Allowance for Doubtful Accounts had a normal balance of $15,000. $17,500 of accounts were written off during the year. What are the year end dollar amounts for:
1. Charged to the Bad Debt Expense account
2. Balance for Allowance for Doubtful Accounts
Question 2 - Alpha Company has the following account balances information for fiscal year 2015 & 2016 (all balances are normal):
Alpha Company December 31
Accounts 2016 2015
Accounts Receivable $50,000 $45,000
Merchandise Inventory 57,000 50,000
Office Supplies 25,000 20,000
Credit Sales 1,000,000 740,000
Interest Income 25,000 20,000
Cost of Goods Sold 460,000 385,000
1. What is the FY 2016 accounts receivable turnover ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word times. (Example 1.123 would be entered 1.1 times)
2. What is the FY 2016 days outstanding for accounts receivable ratio? Enter the answer as a number rounded to one decimal place followed by a space and the word days. (Example 1.123 would be entered 1.1 days)