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

question 1

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 presented for Collision Corporation. If Collision estimates its bad debt to be 2% of net credit sales, what will be the balance in the Allowance for Bad Debts account after the adjustment for bad debts?

• A) $15,000
• B) $40,000
• C) $39,200
• D) $54,200

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