Use the Following Information for Questions Below
Melrose Company Recorded

question 79

Multiple Choice

Use the following information for questions below
Melrose Company recorded $3,500,000 in credit sales in 2020 and prepared the following aging schedule of their $730,000 in Accounts Receivable as at December 31,2020:
$$\begin{array} { c c c } \text { Days outstanding } & \text { Balance } & \text { Estimated percentage uncollectible } \\\hline 0 - 30 \text { days } & \$ 350,000 & 1 \% \\31 - 60 \text { days } & 275,000 & 2 \% \\61 - 90 \text { days } & 67,500 & 5 \% \\\text { 0ver 90 days } & 37,500 & 25 \%\end{array}$$
The balance in their Allowance for Doubtful Accounts before year-end adjustments is a $2,000 credit.
-The bad debt expense for 2020 is

• A)$21,750.
• B)$23,750.
• C)$19,750.
• D)$35,000.

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Definitions:

Maximum Imposed Price

Refers to a price ceiling, which is the highest legal price that can be charged for a product or service, typically set by the government.

Government

The organization or system through which a society or community is governed, typically consisting of various institutions and authorities.

Market

Any structure that allows buyers and sellers to exchange any type of goods, services, and information.

Perfectly Inelastic

A situation in demand where the quantity demanded does not change regardless of changes in price.