The Following Information Is from the 2017 Records of Lane

question 162

Multiple Choice

The following information is from the 2017 records of Lane Bicycle Shop: $\begin{array}{|l|c|}\hline\text { Accounts receivable, December 31, 2017 } & \$ 40,000 \text { (debit) } \\\hline\text { Allowance for Bad Debts, December 31,2017 } \\\text { prior to adjustment }& 1,900 \text { (debit) }\\\hline\text { Net credit sales for } 2017 & 177,000 \\\hline \text { Accounts written off as uncollectible during } \\2017& 18,000 \\\hline\text { Cash sales during } 2017& 27,000\\\hline\end{array}$ Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $5,000 of accounts receivable will be uncollectible.Calculate the ending balance of Allowance for Bad Debts,after the adjustment for bad debts expense,at December 31,2017.

• A)$5,310
• B)$8,800
• C)$9,000
• D)$5,000

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Definitions:

Income From Operations

The profit realized from a business's own operations, excluding income from other sources and before taxes and interest expenses.

Profit Center

A profit center is a branch or division of a company that is treated as a separate unit for the purpose of assessing its revenue-generating ability and profitability.

Department Manager

A professional who oversees the operations and employees of a specific department within a company, ensuring goals and objectives are met.

Authority

The authority or capacity to command, make choices, and ensure compliance.