Ralston Hardware Reported the Following Items for 2014 Experience Indicates That 3% of the Outstanding Accounts Receivable at l

question 80

Multiple Choice

Ralston Hardware reported the following items for 2014: $$\begin{array} { l c } \text { Accounts receivable balance, January 1, 2014 } & \$ 125,000 \\\text { Allowance for doubtful accounts balance, January 1, 2014 } & 3,000 \mathrm { CR } . \\\text { Total credit sales during 2014 } & 653,000 \\\text { Total collections on accounts receivable during 2014 } & 567,000\end{array}$$ Experience indicates that 3% of the outstanding accounts receivable at the end of each year ultimately will be uncollectible.What should be the December 31, 2014, bad debt expense using the percentage- of-receivables method?

• A)$3,330
• B)$6,330
• C)$9,330
• D)$19,590

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Definitions:

Royalty

Payments made to owners of intellectual property, such as patents, copyrights, or trademarks, for the right to use their work.

Direct Investment

An investment involving the acquisition of a controlling interest in a foreign business, typically by purchasing more than 10% of the business's shares.

Aggressive Growth

An investment strategy or business approach focusing on rapid expansion and high returns, often with higher risks.

Market Share

The percentage of total sales in a market captured by a particular company, product, or brand.