Clark Company Estimated the Net Realizable Value of Its Accounts

question 127

Multiple Choice

Clark Company estimated the net realizable value of its accounts receivable as of December 31, 2016, to be $165,000, based on an aging schedule of accounts receivable. Clark has also provided the following information: • The accounts receivable balance on December 31, 2016 was $175,000.
• Uncollectible accounts receivable written off during 2016 totaled $12,000.
• The allowance for doubtful accounts balance on January 1, 2016 was $15,000.
How much is Clark's 2016 bad debt expense?

• A)$10,000.
• B)$7,000.
• C)$13,000.
• D)$3,000.

Analyze cost behavior in the short run using various cost curves and identify the points of diminishing returns.

Understand the effect of an additional unit’s score on the overall average in a dataset.

Calculate profit or loss in a competitive market based on production costs and market price.

Analyze the relations between marginal cost, average variable cost, and average total cost to make production decisions.

---

Definitions:

Elastic Demand

A market situation where the quantity demanded of a good or service changes significantly as its price changes.

Short Run

A period during which at least one of a firm's inputs is fixed, limiting its ability to adjust production levels.

Long Run

A period of time in economics sufficient for all markets to adjust to changes, including the production capacity of the industry.

Price Paid

The actual amount of money exchanged for acquiring a good or service.