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

question 56

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.

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Definitions:

Evidence-Based Research

The process of systematically finding, appraising, and using research findings as the basis for clinical decisions, emphasizing the use of data and scientific results to support practice.

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The behavior that is respectful and considerate of other people, often characterized by manners and etiquette.