Question No : 1 E10-9 Presented below are selected transactions at Ridge Company for 2017. Jan. I Retired a piece of machinery that was purchased on January 1, 2007. The machine cost S62,000 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2014. The computer cost $45,000, It had a useful life of 5 years with no salvage value. The computer was sold for $14,000. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2013. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Instructions Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2016.) Question No 2: The credit manager of Montour Fuel has gathered the following information about the company’s accounts receivable and credit losses during the curent year: Net credit sales for the year.. S8,000,000 Accounts receivable at year-end . 1,750,000 Uncollectible accounts receivable: Actually written off during the year.. $96,000 Estimated portion of year-end receivables expecied to prove uncollectible (per aging schedule).. 84.000 180,000 Prepare one journal entry summarizing the recognition of uncollectible accounts expense for the entire year under each of the following independent assumptions: a. Uncollectible accounts expense is estimated at an amount equal to 3.5 percent of net credit sales. b. Uncollectible accounts expense is recognized by adjusting the balance in the Allowance for Doubtful Accounts to the amount indicated in the year-end aging schedule. The balance in the allowance account at the beginning of the current year was 35,000. (Consider the effect of the write-offs during the year on the balance in the Allowance for Doubtful Accounts.) c. The company uses the direct write-off method of accounting for uncollectible accounts. d. Which of the three methods gives investors and creditors the most accurate assessment of a company’s liquidity? Defend your answer.

“ Question No : 1 E10-9 Presented below are selected transactions at Ridge Company for 2017. Jan. I Retired a piece of machinery that was purchased on January 1, 2007. The machine cost S62,000 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2014. The computer cost $45,000, It had a useful life of 5 years with no salvage value. The computer was sold for $14,000. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2013. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Instructions Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2016.) Question No 2: The credit manager of Montour Fuel has gathered the following information about the company’s accounts receivable and credit losses during the curent year: Net credit sales for the year.. S8,000,000 Accounts receivable at year-end . 1,750,000 Uncollectible accounts receivable: Actually written off during the year.. $96,000 Estimated portion of year-end receivables expecied to prove uncollectible (per aging schedule).. 84.000 180,000 Prepare one journal entry summarizing the recognition of uncollectible accounts expense for the entire year under each of the following independent assumptions: a. Uncollectible accounts expense is estimated at an amount equal to 3.5 percent of net credit sales. b. Uncollectible accounts expense is recognized by adjusting the balance in the Allowance for Doubtful Accounts to the amount indicated in the year-end aging schedule. The balance in the allowance account at the beginning of the current year was 35,000. (Consider the effect of the write-offs during the year on the balance in the Allowance for Doubtful Accounts.) c. The company uses the direct write-off method of accounting for uncollectible accounts. d. Which of the three methods gives investors and creditors the most accurate assessment of a company’s liquidity? Defend your answer. ”