The Following Information Is from the 2015 Records of Armand

question 79

Multiple Choice

The following information is from the 2015 records of Armand Camera Shop: $$\begin{array} { | l | r | } \hline \text { Accounts Receivable, December 31,2015 } & \$ 40,000 \text { (debit) } \\\hline \begin{array} { l } \text { Allowance for Bad Debts, December 31,2015 } \\\text { prior to adjustment }\end{array} & 1,500 \text { (debit) } \\\hline \text { Net credit sales for 2015 } & 175,000 \\\hline \text { Accounts written off as uncollectible during 2015 } & 15,000 \\\hline \text { Cash sales during 2015 } & 27,000 \\\hline\end{array}$$ Bad debts expense is estimated by the percent-of-sales method. The management estimates that 3% of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2015.

• A) $5,250
• B) $3,450
• C) $2,250
• D) $2,850

---

Definitions:

False Consensus Effect

Refers to the tendency of individuals to overestimate how much others share their beliefs, attitudes, and behaviors.

Tax Payments

Monetary contributions imposed by governments on individuals or entities, mandatory for financing government activities.

Overestimate

To estimate something to be greater, larger, or more important than it actually is.

Self-Actualization

The realization of one's potential and the development of self-awareness and personal growth.