At the Beginning of 2015, Peter Dots Has the Following

question 80

Multiple Choice

At the beginning of 2015, Peter Dots has the following ledger balances: During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%.
-Refer to the table above,The ending balance in Bad Debts Expense would be:

• A) $20,000.
• B) $40,000.
• C) $28,000.
• D) $27,000.

---

Definitions:

Concepts

Abstract ideas or mental symbols that represent general categories of objects, events, or qualities.

Formal Reasoning

The process of thinking logically and systematically about abstract concepts and problems.

Specified Clearly

Described or detailed in a clear and exact manner.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.