Barry Waterhouse Uses the Aging of Accounts Receivable Balance Sheet

question 34

Multiple Choice

Barry Waterhouse uses the aging of Accounts Receivable balance sheet approach to estimate uncollectibles. Not yet due accounts are $470,000, with an estimated uncollectible percentage of 1.5%. 1-30 days past due accounts are $100,000, with an estimated uncollectible percentage of 3%. Over 30 days past due accounts are $3,900 with an estimated uncollectible percentage of 10%. If the company has a debit balance in Allowance for Doubtful Accounts of $950, what is the bad debts expense adjusting entry amount? (Round any intermediate calculations and your final answer to the nearest dollar.)

• A) $10,440
• B) $11,390
• C) $9,490
• D) $2,440

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Definitions:

Revised Article 3

An update to the Uniform Commercial Code that governs negotiable instruments such as checks and drafts, intended to modernize and address changes in technology and practice.

Real Defenses

Legal defenses that can be used to invalidate a negotiable instrument, such as forgery, fraud, duress, or incapacity.

Specified

Clearly stated or identified in a particular context or document.

Restrictive Indorsements

Endorsements placed on a negotiable instrument, like a check, that limit how the instrument can be used or further transferred.