Suppose That the Balance of a Company's Allowance for Uncollectible

question 66

Multiple Choice

Suppose that the balance of a company's Allowance for Uncollectible Accounts was $6,200 (credit) at the end of 2015,prior to any adjustments.The company estimated that the total of uncollectible accounts in its accounts receivable was $44,300 at the end of 2015.What amount of bad debt expense would appear in the company's 2015 income statement?

• A)$38,100.
• B)$105,700.
• C)$33,000.
• D)$50,500.

---

Definitions:

Perfect Competition

A market structure characterized by a large number of small firms, identical products sold by all firms, freedom of entry and exit, and perfect information about prices and products.

P = MC

The condition where the price of a good equals its marginal cost, representing an equilibrium in perfect competition markets.

Technological Progress

The advancement in technology which increases production efficiency and leads to economic growth.

Demand for Labor

The total amount of labor that employers want to hire at various wage rates.