Grayhawk Company Reported Net Credit Sales of $588,000 for the Year

question 175

Multiple Choice

Grayhawk Company reported net credit sales of $588,000 for the year ending December 31,2019.On January 1,2019,the Allowance for Doubtful Accounts had a credit balance of $14,400.During 2019,$24,000 of uncollectible accounts receivable were written off.Grayhawk has experienced bad debt losses of 3% of credit sales in prior periods.Using the percentage of credit sales method,what is the adjusted balance in the Allowance for Doubtful Accounts at December 31,2019?

• A)$8,040
• B)$8,400
• C)$17,640
• D)$27,600

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Definitions:

R-(C=O)H

A general formula representing aldehydes, organic compounds where the carbonyl group is bonded to a hydrogen atom.

Butanal

An aldehyde with the formula C4H8O, recognized by its sharp, sweet smell, commonly used in the flavoring and perfume industries.

Line Structure

A simplified representation of a chemical structure using lines to represent chemical bonds and showing the arrangement of atoms within molecules.

Alcohol-congener Levels

Quantitative measures of byproducts produced during fermentation, including congeners that can impact the flavor and potential hangover effects of alcoholic beverages.