As Perry Materials Supply Was Preparing for the Year-End Close,their

question 13

Multiple Choice

As Perry Materials Supply was preparing for the year-end close,their balances were as follows: Perry Materials uses the aging method and has completed the following analysis of the accounts receivable: $\begin{array}{|l|r|r|r|r|r|}\hline\text { Customer } & 1-30 \text { Days } & 31-60 \text { Days } & 61-90 \text { Days } & \begin{array}{c}\text { Over } 90 \\\text { Days }\end{array} & \text { Total Balance }\\\hline \text { Johnson } & \$ 4,600 & \$ 3,200 & & & \$ 7,800 \\\hline \text { Hot Pots, Inc. } & & & 800 & 1,000 & 1,800 \\\hline \text { Potter } & 40,000 & 550 & & & 40,550 \\\hline \text { Harrison } & & 3,600 & 900 & & 4,500 \\\hline \text { Marz } & & & 2,000 & 50 & 2,050 \\\hline \text { Younger } & 65,000 & & & & 65,000 \\\hline \text { Merry Maids } & 5,900 & & & & 5,900 \\\hline \text { Acher } & 12,000 & 6,400 & & & 18,400 \\\hline \text { Totals } & \$ 127,500 & \$ 13,750 & \$ 3,700 & \$ 1,050 & \$ 146,000 \\\hline \begin{array}{l}\text { Uncollectible percentage }\end{array} & 2 \% & 10 \% & 20 \% & 40 \% & \\\hline \begin{array}{l}\text { Estimated uncollectible } \\\text { amount }\end{array} & \$ 2,550 & \$ 1,375 & \$ 740 & \$ 420 & \$ 5,085 \\\hline\end{array}$

- What will the final balance in the Allowance account be,after adjusting for uncollectible account expense?

• A) $2,550
• B) $11,285
• C) $5,085
• D) $11,285.

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Definitions:

Gestalt Principle

A theory in psychology that proposes the human brain sees objects in their entirety before perceiving their individual parts.

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