Lithotech, Inc

question 11

Multiple Choice

Lithotech, Inc. had net sales in 2018 of $800,000. At December 31, 2018, before adjusting entries, the balances in selected accounts were: accounts receivable $122,000 debit, and allowance for doubtful accounts $1,200 credit. Lithotech estimates that 2% of its receivables will prove to be uncollectible. What is the net realizable value of the receivables reported on the statement of financial position at December 31, 2018 after adjusting entries?

• A) $119,560
• B) $120,760
• C) $122,000
• D) $118,360

Recognize the role of property rights in resource allocation and their importance in environmental conservation.

Understand the limitations of cost-benefit analysis in determining the provision of public goods.

Recognize the incentive mechanism provided by the patent system for the creation of new knowledge.

Understand the significance of established property rights for efficient market operations.

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Definitions:

Asset

A present economic resource controlled by the entity as a result of past events. An economic resource is a right that has the potential to produce economic benefits.

Control

The power to influence or direct the behavior of people or the course of events.

Conceptual Framework

An underlying structure in accounting that guides the development of standards and the preparation of financial statements.

Equity

The value of an owner's interest in a property, minus the liabilities tied to the property.