AT&U Company
Data for the Year Ended December 31, Year

question 115

Multiple Choice

AT&U Company
Data for the year ended December 31, Year 1, are presented below:
$\begin{array}{llr} \text { Sales (credit) } &\$2,500,000\\ \text { Sales returns and allowances } &50,000\\ \text { Accounts receivable (December 31, Year 1) } &640,000\\ \text { Allowance for doubtful accounts} &\\ \text { (before adjustment at December 31, Year 1) } &20,000\\ \text {Estimated amount of uncollected accounts based on aging analysis } &45,000\\\end{array}$

-Refer to the figure AT&U Company.If the company estimates its bad debts at 1% of net credit sales,what amount will be reported as bad debt expense for Year 1?

• A) $4,500
• B) $24,500
• C) $25,000
• D) $44,500

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Definitions:

Perceptual Map

A visual representation used in marketing to plot the position of products or brands on a two-dimensional graph, based on consumer perceptions of key attributes.

Market Positions

The rank or standing of a company's product or brand in a particular market, relative to its competitors.

Firms Strengths

The unique assets, capabilities, or advantages that give an organization a competitive edge in the market.

Profitable Products

Goods or services that generate more revenue than the costs associated with producing and delivering them to customers.