King Co'S Allowance for Uncollectible Accounts Was $95,000 at the End

question 63

Multiple Choice

King Co.'s allowance for uncollectible accounts was $95,000 at the end of 2007 and $90,000 at the end of 2006.For the year ended December 31, 2007, King reported bad debt expense of $13,000 in its income statement.What amount did King debit to the appropriate account in 2007 to write off actual bad debts?

• A)$5,000
• B)$8,000
• C)$13,000
• D)$18,000

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Definitions:

Overhead Rate

A calculation used to allocate indirect costs to produced goods, based on a specific base, such as labor hours.

Direct Labor Cost

The total cost of employment for employees who directly contribute to the production of goods or services, including wages and benefits.

Machine-Hours

A measure of the total time that machines are operating in a manufacturing process.

Predetermined Overhead Rate

The predetermined overhead rate is calculated by dividing estimated overhead costs by an allocation base, such as direct labor hours, to allocate overhead costs to products or services.