The Following Information Is from the 2020 Records of R

question 107

Multiple Choice

The following information is from the 2020 records of R & S Commercial Plumbing Company: 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

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Definitions:

Exchange Gain/Loss

A financial result that occurs when the value of foreign currency transactions changes due to fluctuations in exchange rates between the initial transaction and settlement dates.

Functional Currency

The primary currency of the primary economic environment in which an entity operates, used in its financial reporting.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Exchange Rates

The rate at which one currency can be exchanged for another currency, used in global transactions and currency conversion.