Damon Company performs an aging analysis to determine the amount of its bad debts expense to record at the end of each year. At the end of the current year, Damon's aging schedule appeared as follows:

	Amount	Fraction expected to be uncollectible
Current receivables	$12,000	1%
Past-due receivables
1-30 days	2,650	2%
31-60 days	4,050	6%
61-90 days	980	25%
91+ days	630	40%

The balance in Damon's Allowance for Doubtful Accounts was $260 negative (i.e.: the bad debt expense in the prior period had been under estimated).

Using the information above, what is the amount of Damons bad debt expense for the year?

	a.	$ 815
	b.	$2,443
	c.	$ 913
	d.	$1,173

2. Holmes Company received a purchase order for goods it had in stock in December. The customer has asked Holmes to hold the goods for several months until it is ready for them.

Can Holmes recognize revenue in December?

	a.	Yes, if Holmes collects payment prior to delivery
	b.	Yes, if the customer has the right to test the product after delivery
	c.	No, because delivery has not taken place
	d.	No, because the customer has not paid for the goods