During the current year, Khan’s Camera Shop had sales revenue of $220,000, of which $100,800 was on credit. At the start of the current year, Accounts Receivable showed a $22,400 debit balance and the Allowance for Doubtful Accounts showed a $1,210 credit balance. Collections of accounts receivable during the current year amounted to $84,000. The Company uses the percentage of receivables method to account for its estimated uncollectible accounts. Data during the current year follow: a. On December 31, an Accounts Receivable from a deadbeat customer (Melania Trump, Wedding Photographer) of $2,800 from a prior year was determined to be uncollectible; therefore it was written off immediately as a bad debt. b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated uncollectible accounts on 3 percent of the end balance of accounts receivable. What is the Company’s bad debt expense for the year?
During the current year, Khan’s Camera Shop had sales revenue of $220,000, of which $100,800 was on credit. At the start of the current year,
Data during the current year follow:
a. On December 31, an Accounts Receivable from a deadbeat customer (Melania Trump, Wedding Photographer) of $2,800 from a prior year was determined to be uncollectible; therefore it was written off immediately as a
b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated uncollectible accounts on 3 percent of the end balance of accounts receivable.
What is the Company’s bad debt expense for the year?
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