In 2011, the Dugan Co

question 171

Multiple Choice

In 2011, the Dugan Co.had net credit sales of $375,000.On January 1, 2011, Allowance for Doubtful Accounts had a credit balance of $8,000.During 2011, $15,000 of uncollectible accounts receivable were written off.Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivable basis) .If the accounts receivable balance at December 31 was $100,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2011?

• A)$10,000
• B)$17,000
• C)$18,000
• D)$15,000

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Definitions:

Law

A set of rules created by the governing body of a society to maintain harmony, stability, and justice in that society.

Seller's Statement

A document provided by a seller detailing the financial transactions, including the sale price, applicable fees, and adjustments, involved in the sale of property or assets.

Anticipatory Breach

A breach that occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract even before being required to act. Also called constructive breach.

Takamine Guitars

A Japanese company known for manufacturing acoustic guitars and pioneering the development of the acoustic-electric guitar.