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The general ledger account for Accounts Receivable shows a debit balance of $50,000.Allowance for Uncollectible Accounts has a credit balance of $3,000.Net sales for the year were $500,000.In the past,3 percent of sales have proved uncollectible,and an aging of accounts receivable resulted in an estimate of $20,000 of uncollectible accounts receivable.
Using the percentage of net sales method,the Allowance for Uncollectible Accounts balance (after adjustment)would be
a.$15,000.
b.$20,000.
c.$18,000.
d.$12,000.
Markup Percentage
The percentage added to the cost price of goods to cover overhead and profit.
Total Cost
The sum of all costs associated with producing or acquiring goods and services, including direct and indirect expenses.
Cost-Plus Approach
A pricing strategy where a fixed percentage or a fixed amount is added to the cost of the product to determine its selling price.
Markup
An additional amount included with the buying price of items to ensure coverage of operational expenses and earn a profit.
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