The Following Information Is from the Records of Chicago Photography

question 38

Multiple Choice

The following information is from the records of Chicago Photography: $$\begin{array} { | l | l | } \hline\text { Accounts Receivable, December 31,2019 } & \$ 24,000 \text { (debit) }\\\hline\text { Allowance for Bad Debts, December 31,2019 } \\\text { prior to adjustment } & 700 \text { (debit) } \\\hline \text { Net credit sales for 2019 } & 91,000 \\\hline \text { Accounts written off as uncollectible during } & \\2019 & 400 \\\hline\end{array}$$ Bad debts expense is estimated by the aging-of-receivables method.Management estimates that $2950 of accounts receivable will be uncollectible.Calculate the amount of net accounts receivable after the adjustment for bad debts.

• A) $21,750
• B) $21,050
• C) $20,350
• D) $19,950

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Definitions:

Recessionary Gap

A situation where an economy's real GDP is lower than its potential GDP, indicating underutilized resources and economic slack.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, often used in economic analysis and policy-making.

Expansionary Gap

A situation where the actual output of an economy exceeds its potential output, often leading to inflationary pressures.

Recessionary Gap

The situation where an economy's real GDP is less than its potential GDP, leading to underutilization of resources and unemployment.