The following information is from the 2025 records of R & S Commercial Plumbing Company: Accounts receivable, December 31, 2025
$40,000 (debit)
Allowance for Bad Debts, December 31, 2025 prior to adjustment
1,400 (debit)
Net credit sales for 2025
179,000
Accounts written off as uncollectible during 2025
16,000
Cash sales during 2025
27,000
Bad debts expense is estimated by the percent-of-sales method. Management estimates that 5% of net credit sales will be
uncollectible. Calculate the amount of bad debts expense for 2025.
O A. $7,550
OB. $6,950
O c. $8,950
OD. $10,300
k to select your answer.

Suppose that fixed costs for a firm in the automobile industry (start-up costs of factories, capital equipment, and so on) are $5 billion and that variable costs are equal to $17,000 per finished automobile. because more firms increase competition in the market, the market price falls as more firms enter an automobile market, or specifically, , where n represents the number of firms in a market. assume that the initial size of the u.s. and the european automobile markets are 300 million and 533 million people, respectively.a. calculate the equilibrium number of firms in the u.s. and european automobile markets without trade.b. what is the equilibrium price of automobiles in the united states and europe if the automobile industry is closed to foreign trade? c. now suppose that the united states decides on free trade in automobiles with europe. the trade agreement with the europeans adds 533 million consumers to the automobile market, in addition to the 300 million in the united states. how many automobile firms will there be in the united states and europe combined? what will be the new equilibrium price of automobiles? d. why are prices in the united states different in (c) and (b)? are consumers better off with free trade? in what ways?