In 2017 Wilkinson Company Had Net Credit Sales of $2,250,000

question 133

Multiple Choice

In 2017 Wilkinson Company had net credit sales of $2,250,000. On January 1, 2017, Allowance for Doubtful Accounts had a credit balance of $54,000. During 2017, $90,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis) . If the accounts receivable balance at December 31 was $600,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2017?

• A)$ 60,000
• B)$ 25,000
• C)$ 96,000
• D)$ 90,000

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Definitions:

Market Potential

The total demand for a product or service within a market at a given time, assuming full marketing activities.

Covariance

A statistical measure that indicates the extent to which two variables change together; if positive, the variables move in the same direction, and if negative, they move in opposite directions.

Two Assets

Refers to any pair of financial instruments or physical goods that a company or individual holds, often for the purpose of investment or diversification.

PHStat

An Excel add-in designed to perform statistical analysis, specifically tailored for business statistics courses.