Use the Following Information for Questions
Lonely Guy Repair

question 90

Multiple Choice

Use the following information for questions
Lonely Guy Repair Service recently performed repair services for a customer that totaled $400. Somehow the bill was lost and the company accountant was trying to recreate the bill from memory. This is what was remembered: $$\begin{array} { l l } \text { Total bill } & \$ 600 \\\text { Labor profit margin } & \$ 10 \\\text { Materials profit margin } & 20 \% \\\text { Total labor charges } & \$ 390 \\\text { Cost of materials used } & \$ 120 \\\text { Total hourly cost } & \$ 22.50\end{array}$$
-What was the material loading charge?

• A) 37.5%
• B) 43.8%
• C) 61.3%
• D) 75%

Learn the difference between the allowance method and the direct write-off method of accounting for uncollectible accounts.

Recognize the implications of a debit balance in the Allowance for Doubtful Accounts.

Understand the role and presentation of the Allowance for Doubtful Accounts on the balance sheet.

Analyze the impact of collecting a previously written-off account on a company's income and accounting records.

---

Definitions:

Embryonic Stage

A period in prenatal development occurring from the end of the second week through the eighth week after conception, where major organs and structures within the organism begin to develop.

Germinal Stage

The first two weeks of prenatal development after conception, characterized by rapid cell division and the beginning of cell differentiation.

Foetal Stage

The developmental stage of a fetus from 9 weeks after fertilization until birth, characterized by rapid growth and development of bodily structures.

Prenatal Period

The stage of development before birth, from conception to birth, focusing on fetal growth and development within the womb.