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Calistoga Produce estimates bad debt expense at 0.40% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $475,000 and $1,600 respectively, at December 31, 2020. During 2021, Calistoga's credit sales and collections were $324,000 and $313,000, respectively, and $1,770 in accounts receivable were written off. Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is: Multiple Choice $1,031. $2,011. $1,126. $1,776.

Calistoga Produce estimates bad debt expense at 0.40% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $475,000 and $1,600 respectively, at December 31, 2020. During 2021, Calistoga's credit sales and collections were $324,000 and $313,000, respectively, and $1,770 in accounts receivable were written off. Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is: Multiple Choice $1,031. $2,011. $1,126. $1,776.

FINANCIAL ACCOUNTING
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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Please provide the solution along with the calculation and provide an explanation for both the correct and incorrect answers.

Calistoga Produce estimates bad debt expense at 0.40% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $475,000 and $1,600 respectively, at December 31, 2020. During 2021, Calistoga's credit sales and collections were $324,000 and $313,000, respectively, and $1,770 in accounts receivable were written off. Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is: Multiple Choice О $1,031. О $2.011. О $1,126. $1,776.
Transcribed Image Text:Calistoga Produce estimates bad debt expense at 0.40% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $475,000 and $1,600 respectively, at December 31, 2020. During 2021, Calistoga's credit sales and collections were $324,000 and $313,000, respectively, and $1,770 in accounts receivable were written off. Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is: Multiple Choice О $1,031. О $2.011. О $1,126. $1,776.
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