Table 9-5
the Ritchie Company Gathered the Following Information Pertaining

question 83

Multiple Choice

Table 9-5
The Ritchie Company gathered the following information pertaining to its year ended December 31, 2019, prior to any adjustments:
$$\begin{array} { | l | r | r | } \hline \text { Net credit sales for the year } & \$ 780,000 & \\\hline \text { Accounts receivable, Dec. } 31,2019 & 170,000 & \\\hline \text { Allowance for doubtful accounts, } & & \\\text { December } 31,2019 & 3,200 & \mathrm { Cr } . \\\hline & & \\\hline\end{array}$$ Aging of accounts receivable at December 31, 2019:
$$\begin{array} { | l | r | } \hline 1 - 30 \text { days } & \$ 95,000 \\\hline 31 - 60 \text { days } & 38,000 \\\hline 61 - 90 \text { days } & 23,000 \\\hline \text { Over } 90 \text { days } & 14,000 \\\hline \text { Total } & \$ 170,000 \\\hline\end{array}$$
-Refer to Table 9-5. Assume Ritchie uses the aging-of-accounts-receivable method for estimating uncollectible accounts. Ritchie estimates that uncollectible accounts will be aged as follows: 3% for 1-30 days; 5% for 31-60 days; 8% for 61-90 days; and 20% for over 90 days. The adjusting entry to record bad-debt expense for the year is:

• A) \(\begin{array} { | c | r | r | }
• \hline \text { Bad-Debt Expense } & 12,590 & \\
• \hline \text { Accounts Receivable } & & 12,590 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | c | r | r | }
• \hline \text { Bad-Debt Expense } & 6,190 & \\
• \hline \text { Allow. for Doubtful Accts. } & & 6,190 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | r | r | r | }
• \hline \text { Allow. for Doubtful Accts. } & 6,190 & \\
• \hline \text { Bad-Debt Expense } & & 6,190 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | c | r | r | }
• \hline \text { Bad-Debt Expense } & 9,390 & \\
• \hline \text { Allow. for Doubtful Accts. } & & 9,390 \\
• \hline
• \end{array}\)

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Definitions:

Gonadal Artery

An artery that supplies blood to the gonads, such as the testicular artery and ovarian artery.

Superior Mesenteric Artery

A major artery of the abdomen that supplies blood to a large portion of the small intestine and part of the large intestine.

Femoral Artery

A large artery in the thigh that supplies blood to the lower limb.

Popliteal Artery

The continuation of the femoral artery behind the knee, it supplies blood to the knee joint and surrounding muscles.