The Data Presented Below Is for Mellon Corporation for the Year

question 72

Multiple Choice

The data presented below is for Mellon Corporation for the year ended December 31, 2016: $\begin{array}{lr}\text { Sales (100\% on credit) } & \$ 1,500,000 \\\text { Sales returns } & 60,000 \\\text { Accounts Receivable (December 31, 2016) } & 250,000 \\\text { Allowance for Doubtful Accounts [Credit B al ance] (Before adjustment at December } & \\31,2016 &3,000 \\\text { Estimated amount of uncollectible accounts based on an aging analysis }&31,000\\\end{array}$
-Refer to the information for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?

• A) $216,000
• B) $219,000
• C) $222,000
• D) $250,000

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Definitions:

Recognition Clause

A provision in a contract that specifies the conditions under which a party acknowledges something as true, such as union recognition in labor contracts.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, used as an indicator of inflation.

Economic Scale

Economies of scale, which refer to the cost advantages that enterprises obtain due to size, output, or scale of operation.

Critical Factors

Essential elements or conditions necessary for the success of a business or project.