Collision Corporation
Data for Collision Corporation for the Year $~~~~~~$

question 32

Multiple Choice

Collision Corporation
Data for Collision Corporation for the year ended December 31, 2012, are presented below.
Credit Sales $~~~~~~$ $\$ 2,000,000$
Sales retuns and allowances $~~~~~~$ 40,000
Accounts receivable (December 31, 2012) $~~~~~~$ 610,000
Allowance for bad debts
$~~$ (Before adjustment at December 31, 2012) $~~~~~~$ 15,000
Estimated amount of uncollected accounts based on aging analysis $~~~~~~$ 55,000
- Refer to the information provided for Collision Corporation. If Collision uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2012?

• A) $40,000
• B) $55,000
• C) $15,000
• D) $39,200

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Definitions:

Workers

Individuals who are employed to perform specific duties or labor in exchange for compensation.

Steal

The act of taking something without permission or legal right and with the intention to keep it permanently.

Employers

Individuals or organizations that hire and pay people for their work.

Tax Evasion

The illegal practice of not paying taxes by individuals or corporations through various means such as underreporting income or hiding money.