The Following Information Is from the 2016 Records of Armand

question 48

Multiple Choice

The following information is from the 2016 records of Armand Camera Shop: $\begin{array}{|l|l|}\hline\text { Accounts receivable, } 31 \text { December } 2016 & \$ 45,000 \text { (debit) } \\\hline \text { Allowance for doubtful debts, 31 December 2016 } & \\\text { prior to adjustment } & 1500 \text { (debit) } \\\hline \text { Net credit sales for 2016 } & 178,000 \\\hline \text { Accounts written off as uncollectable during 2016 } & 16,000 \\\hline \text { Cash sales during 2016 } & 30,000\\\hline\end{array}$ Bad debts expense is estimated by the percentage of sales method.The management estimates that 4% of net credit sales will be uncollectable.Calculate the amount of bad debts expense for 2016.

• A)$5320
• B)$7120
• C)$5620
• D)$8320

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Definitions:

Fill Orders

The process of completing a customer's purchase request by preparing and dispatching the ordered goods.

External Failure Cost

Costs associated with defects that are found after the product has been delivered to the customer, including returns, repairs, and warranty claims.

Quality Cost Report

A document detailing the costs associated with preventing, detecting, and correcting defective work, often used in quality control efforts.

Delivery Cycle Time

Delivery cycle time is the total time taken from the receipt of a customer order to the delivery of the product, indicating the efficiency of a company's production and distribution process.