Hahn Company Uses the Percentage of Sales Method for Recording $\$ 300,000$

question 51

Multiple Choice

Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $\$ 300,000$ and credit sales are $\$ 1,200,000$ . Management estimates that $1 \%$ is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?

• A) \(\begin{array} { l }\text { Bad Debts Expense}&15,000 \\
• \text { Allowance for Doubtful Accounts}&&15,000 \\\end{array}\)
• B) \(\begin{array} { l }\text { Bad Debts Expense}&12,000\\
• \text { Allowance for Doubtful Accounts}&&12,000 \\\end{array}\)
• C) \(\begin{array} { l }\text { Bad Debts Expense }&12,000\\
• \text {Accounts Receivable }&&12,000 \\\end{array}\)
• D)\(\begin{array} { l } \text { Bad Debts Expense }&15,000 \\
• \text { Accounts Receivable}&&15,000 \\
• \end{array}\)

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Definitions:

Drug Administration

The method by which a drug is taken into the body, such as orally, intravenously, or topically.

Catabolizing Drugs

The metabolic process of breaking down drugs in the body, often leading to their activation or deactivation.

Liver

A vital organ in the body responsible for detoxification, protein synthesis, and production of biochemicals necessary for digestion.

Blood Alcohol Level

A measure of the amount of alcohol present in the bloodstream, typically used to quantify the level of intoxication in an individual.