The Following Information Is from the 2019 Records of Uptown

question 149

Multiple Choice

The following information is from the 2019 records of Uptown Antique Shop: $$\begin{array} { | l | l | } \hline \text { Accounts receivable, December 31, 2019 } & \$ 44,000 \text { (debit) } \\\hline \text { Allowance for Bad Debts, December 31,2019 prior to adjustment } & 1500 \text { (debit) } \\\hline \text { Net credit sales for 2019 } & 180,000 \\\hline \text { Accounts written off as uncollectible during 2019 } & 13,000 \\\hline \text { Cash sales during 2019 } & 27,000 \\\hline\end{array}$$ Bad debts expense is estimated by the percent-of-sales method.Management estimates that 4% of net credit sales will be uncollectible.The ending balance of the Allowance for Bad Debts account after adjustment will be ________.

• A) $8700
• B) $6780
• C) $9780
• D) $5700

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Definitions:

Market Value

The prevailing market rate at which a service or asset is available for purchase or sale.

Paid-in Capital

The total amount of money investors have contributed to a company in exchange for shares of stock.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, increasing the number of shares owned by shareholders.

Stockholders' Equity

The residual interest or ownership in the assets of a corporation after deducting liabilities, often referred to as shareholders' equity.