Ward Company Uses the Allowance Method of Accounting for Bad

question 11

Multiple Choice

Ward Company uses the allowance method of accounting for bad debts. The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the current year.

The following additional information is available for the current year:
If Ward bases its estimate of bad debts on the aging of accounts receivable, Bad Debt Expense for the current year ending December 31 is

• A) $47,000
• B) $48,000
• C) $50,000
• D) $52,000

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Definitions:

Implied-In-Fact Contract

A contract formed by the actions or conduct of the parties involved, rather than written or spoken words.

Express

Clearly and explicitly stated or communicated, leaving no room for doubt or ambiguity.

Acts of Parties

Actions or conduct by individuals that have legal significance or implications.

Lex Mercatoria

A body of commercial law used by merchants throughout Europe during the medieval period, developed based on common trade practices.