Industrial Equipment Supply Is a New Business

question 22

Multiple Choice

Industrial Equipment Supply is a new business.During its first year of operations,credit sales were $41,000 and collections of credit sales were $33,000.One account,$675,was written off.Management uses the aging-of-receivables method to account for bad debts expense and estimated $525 as uncollectible at year end.The ending balance of the Allowance for Bad Debts is ________.

• A) $145
• B) $820
• C) $1200
• D) $525

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Definitions:

Import Quota

A government-imposed limit on the quantity of a specific good that can be imported into a country within a given timeframe.

Specific Tariff

A fixed fee imposed on imported goods based on quantity, such as units, weight, or volume, rather than value.

Ad Valorem Tariff

A tax imposed on imported goods, calculated as a percentage of the value of the imports rather than a fixed rate.

World Price

The global market cost for a product or service, set by the overall demand and supply dynamics.