At the Beginning of 2017, Delicious Drinks, Inc

question 77

Multiple Choice

At the beginning of 2017, Delicious Drinks, Inc. has the following account balances: Accounts Receivable $40,000 (debit balance)
Allowance for Bad Debts $7,000 (credit balance)
Bad Debts Expense $0
During the year, credit sales amounted to $810,000. Cash collected on credit sales amounted to $770,000, and $17,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance of Accounts Receivable is ________.

• A) $40,000
• B) $63,000
• C) $40,500
• D) $17,000

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Definitions:

Tax

Mandatory financial contributions imposed by governments on individuals, corporations, and other entities to fund public expenditure.

Upper Middle Class

A socioeconomic group that is above the middle class, often characterized by higher education, professional employment, and above-average income.

Lorenz Curve

A graphical representation of income or wealth distribution within a population, often used to illustrate economic inequality.

Distribution Of Income

How a nation’s total earnings are spread among its population, impacting wealth inequality.