A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:
All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
A) $1,275
B) $1,775
C) $4,500
D) $4,800
E) $5,500
D) $4,800
Explanation: $800,000 * 0.006 = $4,800
You might also like to view...
Which of the following represents a proper sequencing in which the budgets below are prepared?
a. Direct Material Purchases, Cash, Sales b. Production, Sales, Income Statement c. Sales, Balance Sheet, Direct Labor d. Sales, Production, Manufacturing Overhead
Collaborative effort of two or more independent organizations on a project for mutual gain
A. merger B. acquisition C. joint venture D. spin-off E. strategic alliance
Which of the following is NOT one of the beliefs employees must have to be motivated to make an effort according to expectancy theory?
A. Believe that if they work hard they will accomplish their task B. Believe that task accomplishment will lead to a reward by their employer C. Value the outcomes that they are offered. D. Believe that others who work hard will receive similar rewards
Designing distribution networks to meet customer expectations suggests what three criteria?
A) rapid response, service, and cost B) rapid response, product choice, and service C) product choice, cost, and service D) cost, process choice, and service E) rapid response, cost, and process choice