Question 1. At January 1, 2011, Simpson Co. had a credit balance of $260,000 in its allowance for uncollectible accounts. Based on past experience, 2 percent of Simpson's credit sales have been uncollectible. During 2011, Simpson wrote off $325,000 of account receivable. Credit sales for 2011 were $9,000,000. In its December 31, 2011 balance sheet, what amount should Simpson repost as allowance for uncollectible accounts?
a) $115,000
b) $180,000
c) $245,000
d) $440,000
Question 2. The balance in accounts receivable at the beginning od 2011 was $600. During 2011, $3,200 of credit Sales were recorded. If the ending balance in accounts receivable was $500 and $200 in accounts receivable were written off during the year, the amount of cash collected from customers was
a) $3,100
b) $3,200
c) $3,300
d) $38,00
Question 3. A company uses the allowance method to account for bad debts. What is the effect on each of the following accounts of the collection of an account previously written off?
Allowance for Bad Debt
Uncollectible Accounts Expense
a) Increase Decrease
b) No effect Decrease
c) Increase No Effect
d) No effect No effect