1, For Doubtful Accou

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 20x7 the Golic Co. had net credit
sales of $900,000. On January 1, 20x7,
the Allowance for Doubtful Accounts
had a credit balance of $22,500.
During 20x7, $36,000 of uncollectible
accounts receivable were written off.
Past experience indicates that the
allowance should be 10% of the
balance in receivables (percentage-of-
receivables basis). If the accounts
receivable balance at December 31
was $240,000, what is the required
adjustment to the Allowance for
Doubtful Accounts at December 31,
20x7?
Question 21 options:
$36,000
$24,000
$37,500
$46,500
Transcribed Image Text:In 20x7 the Golic Co. had net credit sales of $900,000. On January 1, 20x7, the Allowance for Doubtful Accounts had a credit balance of $22,500. During 20x7, $36,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage-of- receivables basis). If the accounts receivable balance at December 31 was $240,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 20x7? Question 21 options: $36,000 $24,000 $37,500 $46,500
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