Reference no: EM132178804

Question -

1) At the beginning of the year, ABC Company's allowance for doubtful accounts had a credit balance of $15,000. During the year, ABC wrote off uncollectible accounts receivable of $23,000. ABC estimates that 2% of net credit sales become uncollectible. Credit sales during the year were $625,000 and sales discounts were $12,000. What is the end of year adjusted balance of the allowance for doubtful accounts?:

a. $4,260

b. $8,000

c. $12,260

d. $12,500

e. $20,260

2) X Company is deciding whether to retain its office telephone system or replace it with a new system. Which cost should NOT be considered when making this decision?

a. Salvage value of current system

b. Cost of current system

c. Incremental cost

d. Sunk cost