The Following Information Is from the 2016 Records of Armand

question 61

Multiple Choice

The following information is from the 2016 records of Armand Camera Shop: $\begin{array}{|l|l|}\hline \text { Accounts receivable, 31 December } 2016 &\$ 45,000 \text { (debit) } \\\hline\begin{array}{l}\text { Allowance for doubtful debts, 31 December } 2016\end{array} &\\\text { prior to adjustment } & 1900 \text { (debit) } \\\hline \text { Net credit sales for } 2016 & 178,000 \\\hline \text { Accounts written off as uncollectable during 2016 } & 19,000 \\\hline \text { Cash sales during } 2016 & 28,000\\\hline\end{array}$ Bad debts expense is estimated by the ageing of accounts receivable method.Management estimates that $8000 of accounts receivable will be uncollectable.Calculate the Allowance for doubtful debts after the adjustment for bad debt expense at 31 December 2016.

• A)$5340
• B)$8000
• C)$6000
• D)$11,800

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Definitions:

Margin

The amount of equity contributed by an investor as a percentage of the current market value of the securities held in a margin account.

Marked To Market

A method of measuring the fair value of accounts that can fluctuate over time, such as assets and liabilities, by updating them to their current market values.

Good-Faith Deposit

A sum of money provided as a sign of commitment or seriousness, often used in transactions like real estate purchases to secure a deal before finalizing.

Broker

An individual or firm that acts as an intermediary between buyers and sellers, usually charging a commission for services.