Ramsey Company has made an analysis of its sales and accounts receivable for the past 5 years. Assume that all accounts written off in a year related to sales of the preceding year and were part of the accounts receivable at the end of that year. That is, no account is written off before the end of the year of the sale, and all accounts remaining unpaid are written off before the end of the year following the sale. The analysis showed the following:

The balance in Allowance for Uncollectible Accounts on December 31, 20X4, was $16,100. Use all the relevant data above in answering the following questions.
1. Determine the bad debt expense for 20X5 and the balance of the Allowance for Uncollectible Accounts for December 31, 20X5, using the percentage of sales method.
2. Repeat requirement 1 using the percentage of ending accounts receivable method.

  • CreatedFebruary 20, 2015
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