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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