Jumpin Corporation Uses the Percent-Of-Sales Method to Estimate Uncollectibles

question 159

Multiple Choice

Jumpin Corporation uses the percent-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,000,000,and management estimates 2% will be uncollectible.The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $1,000.The amount of Uncollectible-Account Expense reported on the income statement will be:

• A)$1,000.
• B)$39,000.
• C)$40,000.
• D)$41,000.

---

Definitions:

Buddhism

A major world religion or philosophy founded in northeastern India in the 5th century BC, based on the teachings of Siddhartha Gautama, known as the Buddha.

Freedom Summer

A 1964 voter registration drive aimed at increasing the number of registered black voters in Mississippi.

Civil Rights Act

A landmark piece of legislation in the United States that aimed to eliminate legal discrimination against African Americans, particularly in the areas of voting, education, employment, and the use of public facilities.

Voting Rights

Legal rights that dictate who is entitled to participate in the electoral process of a democracy or other forms of government, often including age, citizenship, and residency requirements, and historically have been subject to significant struggle and changes.