Reference no: EM133004600

Problem 1: The collection of accounts receivable that had previously been written off under the allowance method of accounting for uncollectible accounts receivable:

a. Will increase profit

b. Will decrease profit

c. Will not affect profit

d. Will increase the carrying amount (net realizable value) of accounts receivable

e. Will not affect the carrying amount (net realizable value) of accounts receivable

Pitt Company has the following account balances at the end of the current year:

Net Credit Sales $468,000

Accounts Receivable $192,000

Allowance for Doubtful Accounts $3,600 Debit (before adjustment)

Problem 2: Pitt uses 5% of net credit sales to estimate uncollectible accounts receivable at year end. The amount of bad debts expense to be recorded at year end is:

a. $13,200

b. $19,800

c. $23,400

d. $27,000

e. None of the above