Use This Information to Answer the Following Question

question 44

Multiple Choice

Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $100,000.Allowance for Uncollectible Accounts has a credit balance of $2,000.Net sales for the year were $1,000,000.In the past,2 percent of sales have proved uncollectible,and an aging of accounts receivable accounts results in an estimate of $27,000 of uncollectible accounts.
Using the accounts receivable aging method,the Allowance for Uncollectible Accounts balance (after adjustment) would be

• A) $29,000.
• B) $28,000.
• C) $27,000.
• D) $25,000.

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Definitions:

Income Effect

A change in the consumption patterns of individuals arising from a change in their real income, due to shifts in prices or income levels.

Unskilled Workers

Workers who have no specific training or specialized skills and usually perform simple tasks that require limited education.

Minimum Wage

The minimum wage permitted by law that employers can pay their employees, whether it's calculated by the hour, day, or month.

Backward-Bending Labor Supply Curve

As the wage rate rises, more and more people are willing to work longer and longer hours up to a point. They will then substitute more leisure time for higher earnings.