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

question 29

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?

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Definitions:

Quantity

The amount or number of a material or immaterial good considered as a unit or in discrete amounts.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive in the market.

Price

The monetary figure anticipated, obligated, or dispensed in transaction for a service or good.

Quantity

The amount or number of a material or immaterial good or service.