Bigg and Talle Corporation Uses the Percent-Of-Sales Method to Estimate

question 129

Multiple Choice

Bigg and Talle Corporation uses the percent-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $5,000,000, and management estimates 2% will be uncollectible. Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $16,000. The amount of expense reported on the income statement will be:

• A)$116,000.
• B)$100,000.
• C)$ 84,000.
• D)$ 16,000.

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Definitions:

Subjective Evaluation

The process of judging or assessing something based on personal feelings, tastes, or opinions rather than objective criteria.

Sentiment

A complex combination of feelings and opinions as a response to a situation, person, or object.

Affect

A term used in psychology to describe the experience of feeling or emotion.

Emotion

A complex psychological state that involves an experiential, physiological, and behavioral response to a personally significant matter.