Bigg and Talle Corporation Uses the Percent-Of-Sales Method to Estimate

question 118

Multiple Choice

Bigg and Talle Corporation uses the percent-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $5,000,000, and management estimates 2% will be uncollectible. Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $16,000. The amount of expense reported on the income statement will be:

• A) $16,000.
• B) $84,000.
• C) $100,000.
• D) $116,000.

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Definitions:

Anterior Lobe

The front portion of an organ or gland, which can refer specifically to a part of the pituitary gland that releases hormones controlling various physiological processes.

Pituitary Gland

A small endocrine gland in the brain that produces and releases hormones controlling growth, blood pressure, and other important body functions.

Hypothalamus

The hypothalamus is a region of the brain responsible for the regulation of certain metabolic processes and other activities of the autonomic nervous system, including temperature control, hunger, and thirst.

Insulin-Like Growth Factors

A group of proteins with similar structure to insulin that play an important role in growth and development.