-Refer to the Data for Benton Corporation

question 7

Multiple Choice

-Refer to the data for Benton Corporation.
If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense for 2015?

• A)$ 2,900
• B)$11,500
• C)$23,500
• D)$26,900

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Definitions:

Collection Float

The time period between when a check is deposited in a bank and when the funds are available, impacting the company's cash flow.

Lockbox System

A service provided by banks to companies for the receipt of payment from customers, where payments are sent to a special post office box rather than to the company.

Treasury Bills

Short-term government securities issued at a discount from their face value, with maturities ranging from a few days to 52 weeks.

Collection Time

The average duration it takes for a company to collect payments owed by its customers, often measured in days.