In 2015, Warehouse 13 Had Net Credit Sales of $750,000

question 107

Multiple Choice

In 2015, Warehouse 13 had net credit sales of $750,000. On January 1, 2015, Allowance for Doubtful Accounts had a credit balance of $16,000. During 2015, $29,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivable basis) . If the accounts receivable balance at December 31 was $150,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2015?

• A)$150,000
• B)$29,000
• C)$28,000
• D)$31,000

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Definitions:

Investment Classification

The categorization of investments based on their characteristics, risk, and objectives.

Statement of Financial Position

A financial statement that outlines an organization's assets, liabilities, and equity at a specific point in time; commonly known as a balance sheet.

Special Rights and Privileges

Specific advantages or entitlements granted to certain shareholders or members of a company, such as preferred dividends or voting rights.

Intangible Assets

Intangible assets are non-physical assets owned by a business, such as patents, trademarks, and goodwill, that have value in commercial operations.