By the end of its first year of operations, previts corporation has credit sales of $610,000 and accounts receivable of $210,000. given it’s the first year of operations, previts’ management is unsure how much allowance for uncollectible accounts it should establish. one of the company’s competitors, which has been in the same industry for an extended period, estimates uncollectible accounts to be 3% of ending accounts receivable, so previts decides to use that same amount. however, actual write-offs in the following year were 15% of the $210,000 (= $31,500). previts’ inexperience in the industry led to making sales to high credit risk customers. record the adjustment entry for uncollectible accounts.

Lincoln company has an accounting policy for internal reporting purposes whereby the costs of any research and development projects that are over 70 percent likely to succeed are capitalized and then depreciated over a five-year period with a full year of depreciation in the year of capitalization. in the current year, $400,000 was spent on project one, and it was 55 percent likely to succeed, $600,000 was spent on project two, and it was 65 percent likely to succeed, and $900,000 was spent on project three, and it was 75 percent likely to succeed. in converting the internal financial statements to external financial statements, by how much will net income for the current year have to be reduced? a. $180,000b. $380,000c. $720,000d. $900,000

On january 1, vermont corporation had 40,000 shares of $10 par value common stock issued and outstanding. all 40,000 shares has been issued in a prior period at $20.00 per share. on february 1, vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on march 1. the journal entry to record the purchase of the treasury shares on february 1 would include a credit to treasury stock for $90,000 debit to treasury stock for $90,000 credit to a gain account for $112,500 debit to a loss account for $112,500

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