The following information is from the 2017 records of Lane Bicycle Shop
Accounts receivable, December 31, 2017 $40,000 (debit)
Allowance for Bad Debts, December 31, 2017
prior to adjustment 1,900 (debit)
Net credit sales for 2017 177,000
Accounts written off as uncollectible during 2017 18,000
Cash sales during 2017 27,000
Bad debts expense is estimated by the aging-of-receivables method. Management estimates that $5,000 of accounts receivable will be uncollectible. Calculate the ending balance of Allowance for Bad Debts, after the adjustment for bad debts expense, at December 31, 2017.
A) $5,310
B) $8,800
C) $9,000
D) $5,000
D .Under the aging-of-receivables method, the Allowance for Bad Debts account is adjusted to the total amount estimated to be uncollectible.
You might also like to view...
Discuss the various laws and contracts that govern the rights and obligations of a shareholder
According to Section 9(C)(3) of the NLRA, after the conduct of a valid election in any bargaining unit, no new election can be held for a period of:
a. three months. b. six months. c. twelve-months. d. nine months.
A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is:
A. Debit Bond Interest Payable $22,000; credit Cash $22,000. B. Debit Bond Interest Expense $44,000; credit Cash $44,000. C. Debit Bond Interest Expense $22,000; credit Cash $22,000. D. Debit Bond Interest Expense $550,000; credit Cash $550,000. E. No entry is needed, since no interest is paid until the bond is due.
While studying the relationship between advertising and sales growth, a researcher determines that the relationship is sometimes weak and at other times moderate. This variation from one situation to another is the variation in the _____ of the relationship between advertising and sales growth.
A. strength of association B. type C. dispersion D. presence E. direction