Black Company provides for bad debts expense at the rate of 2% of credit sales. The following data areavailable for 2021:Allowance for doubtful accounts, 1/1/21 (Cr.). . RM 10,500Accounts written off as uncollectible during 2021.6,500Credit sales in 2021.1,750,000The Allowance for Doubtful Accounts balance at December 31, 2021, should beO A. RM35,000O B. RM31,000OC. RM39,000O D. RM6,500 In 2021, Freeze Company had credit sales of RM1,200,000 and granted sales discounts of RM24,000. OnJanuary 1, 2021, Allowance for Doubtful Accounts had a credit balance of RM30,000. During 2021, RM50,000 ofuncollectible accounts receivable were written off. Past experience indicates that 3% of net credit salesbecome uncollectible. What should be the adjusted balance of Allowance for Doubtful Accounts atDecember 31, 2021?O A. RM35,280B. RM66,000O C. RM15,280O D. RM16,000

Solution 1: Bad debts expense for the year = Credit sales * 2% = 1,750,000*2% = 35,000 Allowance for…

Black Company provides for bad debts expense at the rate of 2% of credit sales. The following dat available for 2021: Allowance for doubtful accounts, 1/1/21 (Cr.).. RM 10,500 Accounts written off as uncollectible during 2021. 6,500 Credit sales in 2021.. 1,750,000 The Allowance for Doubtful Accounts balance at December 31, 2021, should be O A. RM35,000 O B. RM31,000 O C. RM39,000 O D. RM6,500

Black Company provides for bad debts expense at the rate of 2% of credit sales. The following dat available for 2021: Allowance for doubtful accounts, 1/1/21 (Cr.).. RM 10,500 Accounts written off as uncollectible during 2021. 6,500 Credit sales in 2021.. 1,750,000 The Allowance for Doubtful Accounts balance at December 31, 2021, should be O A. RM35,000 O B. RM31,000 O C. RM39,000 O D. RM6,500

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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