Use the Following to Answer Questions

question 46

Multiple Choice

Use the following to answer questions
The Miller Company earned $190,000 of revenue on account during 2016.There was no beginning balance in the accounts receivable and allowance accounts.During 2016 Miller collected $136,000 of cash from its receivables accounts.The company estimates that it will be unable to collect 3% of its sales on account.
37.The amount of uncollectible accounts expense recognized on the 2016 income statement was
A.$5,700.
B.$1,320.
C.$4,080.
D.$54,000.
Answer: A
Learning Objective: 07-01
Topic Area: Uncollectible accounts ― Percent of revenue method
AACSB: Knowledge Application
AICPA: FN Measurement
AICPA: BB Critical Thinking
Blooms: Apply
Level of Difficulty: 2 Medium
Feedback: $190,000 revenue on account x 3% = $5,700
-The balance in Accounts Receivable at the beginning of the period amounted to $16,000.During the period $64,000 of credit sales were made to customers.If the ending balance in Accounts Receivable amounted to $10,000,and uncollectible accounts expense amounted to $4,000,then the amount of cash inflow from customers that would appear in the operating activities section of the cash flow statement would be:

• A)$66,000.
• B)$64,000.
• C)$80,000.
• D)None of these answers are correct.

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Definitions:

Duty Of Obedience

The requirement for directors and officers of an organization to act in accordance with its goals and directives.

Clearly Stated

Expressed in a manner that leaves no doubt about the meaning or intentions.

Good Faith

The principle of honesty and sincerity in dealings, especially in fulfilling contractual obligations.

Gratuitous Agent

An individual who acts on behalf of another without receiving any compensation for his/her actions.