The following information relates to a companys accounts receivable: gross accounts receivable balance at the beginning of
Question:
The following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning of the year, $310,000; allowance for uncollectible accounts at the beginning of the year, $20,000 (credit balance); credit sales during the year, $1,000,000; accounts receivable written off during the year, $11,000; cash collections from customers, $900,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales.
1. Calculate bad debt expense for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.
The following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning of the year, $310,000; allowance for uncollectible accounts at the beginning of the year, $20,000 (credit balance); credit sales during the year, $1,000,000; accounts receivable written off during the year, $11,000; cash collections from customers, $900,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales.
1. Calculate bad debt expense for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.
Expert Answer:
1 To calculate bad debt expense for the year well use the percentage of credit sales method The bad ... View the full answer
