QUESTION 2 (15 marks) Hanoi Company provides for Doubtful Account based on 2.5% of gross Account Receivable. The following data is available for 2020:
Credit sales during 2020
$4,500,000
Accounts receivable
1,200,000
Allowances for doubtful accounts (1/1/2020)
37,000
Collections of accounts written off in prior year
(customers credit was re-established)
9,000
Customer accounts written off as uncollectible
during 2020
33,200

Required:
1) Make the adjusting entry to record the Allowance for Doubtful Account on December 31, 2020. (5.5 marks)
2) According to part a, what is the balance for Cash Realizable Value as of December 31, 2020? (4.5 marks)
3) Discuss the reasons why the allowance method is preferable to direct write-off method. (5.0 marks)

QUESTION 3 (20 marks)
Saigon Interior Company purchased a delivery truck in cash on January 1, 2019 with the following information:
a) Purchase price: $.
b) Attorney’s fee: $.
c) Two year maintenance policy: $.
The truck has its expected useful life of 10 years with expected miles to be driven of 110,000. The truck can be sold for $6,000 after 10 years of usage. Actual miles driven were 16,000 in 2019 and 13,000 in 2020.
Required:
1) Fill the dot (.) with a reasonable amount for given transactions above. (5.0 marks).
2) Prepare journal entry for the transaction on January 1, 2019. (2.5 marks)
3) Compute depreciation expense for 2019 and 2020 using (a) the straight-line method, (b) units of activity method, and (c) the double reducing balance method. (2.5 marks)
4) Which depreciation method do you prefer? Why? (5.0 marks)
5) Why is depreciation reviewed periodically. (5.0 marks)

QUESTION 4 (20 marks)
“Accounting and bookkeeping are the same”. Do you agree? Explain (20 marks). (word count: 650 - 750 words)

QUESTION 5 (20 marks)
“Accounting is ingrained in our society and it is vital to our economic system.” Do you agree? Explain. (20.00 marks). (word count: 650-750 words)