A company started the year with accounts receivable of $15,000 and an allowance of $(1,500). During the year, sales (all on account) were $110,000 and cash collections for sales amounted to $105,000. Also, $1,000 worth of uncollectible accounts were specifically identified and written off. Then, at year end, the company estimated that 10% of ending accounts receivable would be uncollectible.
1. Record the transactions (including beginning balances) in the accounting equation.
2. What amount will be shown on the year-end income statement for bad debts expense?
3. What is the balance in the allowance account after all adjustments have been made?

  • CreatedSeptember 01, 2014
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