The Following Information Pertains to Lightning,Inc Lightning Uses the Aging Method and Estimates It Will Not

question 49

Multiple Choice

The following information pertains to Lightning,Inc.at the end of December:
$$\begin{array} { l r } \text { Credit Sales } & \$ 60,000 \\\text { Accounts Payable } & 10,000 \\\text { Accounts Receivable } & 7,000 \\\text { Allowance for Uncollectible Accounts } & \$ 400 \text { credit } \\\text { Cash Sales } & 20,000\end{array}$$ Lightning uses the aging method and estimates it will not collect 2% of accounts receivable not yet due,10% of receivables less than 30 days past due,and 40% of receivables greater than 30 days past due.The accounts receivable balance of $7,000 consists of $3,500 not yet due,$2,000 less than 30 days past due,and $1,500 greater than 30 days past due.What is the appropriate amount of Bad Debt Expense?

• A)$400.
• B)$470.
• C)$870.
• D)$1,270.

---

Definitions:

Competitors

Entities or individuals involved in the same industry or market, vying for the same customer base or resources.

Meteoric Rise

A rapid and often sudden increase in success, popularity, or visibility.

Public Imagination

The collective thoughts, ideas, and fantasies of the public about current or future possibilities.

Inc. 500

An annual ranking of the 500 fastest-growing private companies in the United States, published by Inc. magazine.