Temper Company Has Credit Sales of $3 Assuming the Company Uses the Percent of Sales Method, What

question 139

Multiple Choice

Temper Company has credit sales of $3.10 million for year 2010. Temper estimates that .9% of the credit sales will not be collected. On December 31, 2010, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $2,222. Temper prepares a schedule of its December 31, 2010, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:
$\begin{array}{rlr}\text { December } 31,2010 & \text { Age of Accounts } & \text { Expected Percent } \\\text { Accounts Receivable } & \text { Receivable } & \text { Uncollectible }\\\$ 620,000 & \text { Not yet due } & 1.05 \% \\248,000 & 1 \text { to } 30 \text { days past due } & 1.80 \\49,600 & 31 \text { to } 60 \text { days past due } & 6.30 \\24,800 & 61 \text { to } 90 \text { days past due } & 31.75 \\4,960 & \text { Over } 90 \text { days past due } & 66.00\end{array}$

Assuming the company uses the percent of sales method, what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry?

• A) $25,246.40
• B) $27,468.40
• C) $23,024.40
• D) $27,900.00
• E) $24,420.40

---

Definitions:

Verbally Aggressive

Exhibiting aggression or hostility through words, including insults, threats, or bullying language.

Physically Aggressive

Exhibiting behavior that involves physical force intended to harm or damage others or objects.

Psychological Harm

Emotional or mental injury inflicted upon an individual, which can result from experiences such as stress, trauma, or abuse.

Aggression

A range of behaviors that can result in both physical and psychological harm to oneself, others, or objects in the environment, often manifesting as anger or hostility.