Oceanside Company Uses the Balance Sheet Approach in Estimating Uncollectible

question 11

Multiple Choice

Oceanside Company uses the balance sheet approach in estimating uncollectible accounts expense. It has just completed an aging analysis of accounts receivable at December 31, 2009. This analysis disclosed the following information: $$\begin{array} { | l | c | c | } \hline & \text { Age } & \text { Percentage } \\\hline & \text { Group } & \text { Considered } \\\hline & \text { Total } & \text { Uncollectible } \\\hline \text { Not yet due } & \$ 52,000 & 1 \% \\\hline 1 - 30 \text { days past due } & \$ 30,000 & 2 \% \\\hline 31 - 60 \text { past due } & \$ 13,000 & 8 \% \\\hline\end{array}$$ What is the appropriate balance for Oceanside's Allowance for Impairment at December 31, 2009

• A) $95,000.
• B) 2% of credit sales in 2009.
• C) $1,560.
• D) $2,160.

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Definitions:

Trivial Activities

Nonessential activities that are completely discretionary and do not directly support a person’s goals.

Ongoing Activities

Necessary “maintenance” tasks that should be managed carefully, so that they don’t take up too much time.

Perfectionist

A personality trait characterized by striving for flawlessness and setting excessively high performance standards.

Support System

A network of people who provide an individual with practical or emotional support.