Albertsons Locksmith Corporation started operations on January 1, 2016. Albertsons estimates un-collectibles using the percentage-of-credit-sales method. The

Question:

Albertson€™s Locksmith started operations on January 1, 2016. Albertson€™s estimates un-collectibles using the percentage-of-credit-sales method. The following information pertains to the company€™s sales, receivables, and collections for the first three years of operation:

2017 2016 2018 Credit sales $240,000 $190,000 $105,000 Cash sales 8,000 1,000 4,000 Total sales Write-offs $248,000 $194

Albertson€™s estimates uncollectible accounts at 4 percent of credit sales.

REQUIRED:
a. What is the balance of the allowance for un-collectibles account as of the end of 2016, 2017, and 2018?
b. What is the (net) balance of the accounts receivable account as of the end of 2016, 2017, and 2018?
c. Comment on Albertson€™s annual estimates.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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