At the Beginning of 2017,Smoothie Town,Inc

question 70

Multiple Choice

At the beginning of 2017,Smoothie Town,Inc.has the following account balances:
Accounts receivable $40,000 (Debit)
Allowance for Bad Debts $6,000 (Credit)
During the year,credit sales were $820,000.Cash collected on credit sales was $750,000,and $15,000 was written off.Smoothie Town uses the aging-of-receivables method to record bad debts expense.The amount estimated as uncollectible was $28,000.The amount of Bad Debts Expense for 2017 is ________.

• A)$37,000
• B)$28,000
• C)$9,000
• D)$13,000

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Definitions:

Extraordinary Items

Events and transactions that are distinct from the ordinary activities of a company and have a significant impact on its financial position.

Discontinued Operations

Parts of a company's business that have been sold, disposed of, or otherwise terminated, which are reported separately from continuing operations in financial statements.

Systematic Allocation

The process of apportioning costs or revenues over a specific period in a methodical and logical manner, often used in depreciation and amortization.

Immediate Recognition

The accounting practice of recording revenues or expenses as soon as they are incurred, without deferral.