The Allowance for Uncollectible Accounts has a credit balance of $2,000 prior to the end-of-month adjustment. Sales
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Question:
The Allowance for Uncollectible Accounts has a credit balance of $2,000 prior to the end-of-month adjustment. Sales on credit for the month were $1,000,000. Past experience indicates that 2.5 percent of the month’s credit sales will become uncollectible. Alternatively, an aging of Accounts Receivable accounts shows an estimated total of all uncollectible accounts receivable to be $30,000.
Using the percentage of credit sales method, the Allowance for Uncollectible Accounts should be credited for:
a. $27,000.
b. $2,000.
c. $25,000.
d. $23,000.
Related Book For
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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