The Following Information Is from the 2020 Records of R

question 18

Multiple Choice

The following information is from the 2020 records of R & S Commercial Plumbing Company: $$\begin{array} { | l | l | } \hline \text { Accounts receivable, December 31, 2020 } & \$ 43,000 \text { (debit) } \\\hline \text { Allowance for Bad Debts, December 31,2020 prior to adjustment } & 1500 \text { (debit) } \\\hline \text { Net credit sales for 2020 } & 180,000 \\\hline \text { Accounts written off as uncollectible during 2017 } & 16,000 \\\hline \text { Cash sales during 2020 } & 26,000 \\\hline\end{array}$$ 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 2020.

• A) $10,800
• B) $8220
• C) $12,360
• D) $9300

---

Definitions:

Phi Phenomenon

An optical illusion where stationary objects shown in rapid succession appear to be in motion.

Recency Effect

The tendency to remember the most recently presented information best, often seen in studies of memory and cognition.

Chunking Effect

Chunking Effect is the cognitive process of breaking down complex information into smaller, manageable units (or chunks) to improve memory and recall.

Primacy Effect

The tendency to remember information at the beginning of a list better than information that comes later.