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:

Elaboration Encoding

A mnemonic device involving the addition of extra information to aid in the memory of something.

Spreading Activation

A method within cognitive science that explains how information is retrieved in the brain, suggesting that the activation of one concept triggers related concepts.

Semantic Network

A cognitive model that represents concepts and ideas as a network of interconnected nodes, where each node represents a concept, and edges represent the relationship or associations between concepts.

Prospective Memory Processes

Cognitive processes involving the ability to remember to perform an intended action in the future, such as remembering to take medication at a certain time.