The Following Information Is from the 2017 Records of Armand

question 28

Multiple Choice

The following information is from the 2017 records of Armand Music Shop: $\begin{array}{|l|r|}\hline \text { Accounts receivable, December 31, 2017 } & \$ 41,000 \text { (debit) } \\\hline \begin{array}{l}\text { Allowance for Bad Debts, December 31,2017 } \\\text { prior to adjustment }\end{array} & 1,300 \text { (debit) } \\\hline \text { Net credit sales for 2017 } & 175,000 \\\hline \text { Accounts written off as uncollectible during } & \\\hline 2017 & 15,000 \\\hline \text { Cash sales during 2017 } & 30,000 \\\hline\end{array}$ Bad debts expense is estimated by the percent-of-sales method.Management estimates that 6% of net credit sales will be uncollectible.Calculate the amount of bad debts expense for 2017.

• A)$10,500
• B)$8,040
• C)$12,300
• D)$9,200

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Definitions:

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances in bank accounts.

Economic Pie

A metaphor for the total amount of wealth or resources available in an economy that can be distributed among its participants.

Standard of Living

The extent of financial status, comfortability, worldly possessions, and essentials provided to a certain community class or area.

Total Output

The aggregate production of goods and services in an economy at a given time, typically measured as Gross Domestic Product (GDP).