Jensen Corporation Uses the Percentage-Of-Sales Method to Estimate Uncollectibles

question 68

Multiple Choice

Jensen Corporation uses the percentage-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,010,000 and management estimates 3% will be uncollectible.The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $18,000.After all adjusting entries are made,the balance in Allowance for Uncollectible Accounts will be:

• A)$18,000.
• B)$18,540.
• C)$42,300.
• D)$60,300.

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Definitions:

Anti-Roll Bars

Components of a vehicle's suspension system designed to reduce body roll during sharp turns or irregular road conditions, enhancing stability.

Excessive Camber

When a vehicle's wheel tilt either inward or outward too much, leading to uneven tire wear and potential steering issues.

Excessive Caster

A condition in the alignment of vehicle wheels where the caster angle is beyond the recommended specification, affecting steering and stability.

Underinflation

The condition where a tire contains less than the recommended amount of air pressure, negatively affecting performance and safety.