Temper Company Has Credit Sales of $3

question 5

Multiple Choice

Temper Company has credit sales of $3.10 million for year 2013.Temper estimates that .9% of the credit sales will not be collected.On December 31,2013,the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $2,222.Temper prepares a schedule of its December 31,2013,accounts receivable by age.Based on past experience,it estimates the percent of receivables in each age category that will become uncollectible.This information is summarized here: Assuming the company uses the aging of Accounts Receivable method,what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry?

• A)$25,246.40
• B)$27,468.40
• C)$23,024.40
• D)$27,900.00
• E)$24,420.40

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Definitions:

Budget Line

All combinations of goods for which the total amount of money spent is equal to income.

Rational Producers

Producers who aim to maximize their profits or benefits by making decisions based on logical analysis and available information.

Input Prices

The costs associated with the purchase of the raw materials, labor, and other inputs required in the production of goods or services.

Short- And Long-Run

Terms used in economics to differentiate between time periods: short-run where at least one input is fixed and long-run where all inputs are variable.