Multiple Choice Answers

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year, and an analysis of accounts in the customers ledger indicates doubtful accounts of $15,000. Which of the following records the proper provision for doubtful accounts?

a. increase Uncollectible Accounts Expense, $15,500; increase Allowance for Doubtful Accounts, $15,500
b. decrease Allowance for Doubtful Accounts, $500; decrease Uncollectible Accounts Expense, $500
c. decrease Allowance for Doubtful Accounts, $14,500; decrease Uncollectible Accounts Expense, $14,500
d. increase Uncollectible Accounts Expense, $14,500; increase Allowance for Doubtful Accounts, $14,500

Allowance for Doubtful Accounts has an unadjusted balance of $1,100 at the end of the year, and an analysis of customers’ accounts indicates doubtful accounts of $12,900. Which of the following records the proper provision for doubtful accounts?

a. increase Uncollectible Accounts Expense, $14,000; increase Allowance for Doubtful Accounts, $14,000
b. decrease Allowance for Doubtful Accounts, $14,000; decrease Uncollectible Accounts Expense, $14,000
c. decrease Allowance for Doubtful Accounts, $11,800; decrease Uncollectible Accounts Expense, $11,800
d. increase Uncollectible Accounts Expense, $11,800; increase Allowance for Doubtful Accounts, $11,800

On April 1, a machine with a useful life of 4 years and a residual value of $12,000 was purchased for $87,000. What is depreciation expense in the year of purchase under declining balance depreciation assuming a December 31 year end?

a. $32,625
b. $28,125
c. $43,500
d. $37,500

An employee whose cumulative gross pay is $20,000 receives an hourly rate of $15 with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 44; federal income tax withheld, $120; FICA tax rate, 7.5%; federal unemployment compensation tax, 5.4% on the first $7,000; state unemployment tax, 0.8% on the first $7,000. What is the employer’s payroll tax expense for the current week?

a. $ -0-
b. $51.75
c. $93.27
d. $42.78

Research and development costs are __________.

a. Added to the cost of patents
b. Capitalized under intangible assets
c. Charged to operating expenses
d. Charged to operating expenses only if there is no future benefit