Exercise 5-65 (Algorithmic) Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Losses from Year Credit Sales Uncollectible Accounts* 2015 $869,000 $10,625 2016 952,000 14,840 2017 1,083,000 16,790 2018 1,189,000 16,850 *Losses from uncollectible accounts are the actual losses related to sales of that year (rather than write-offs of that year). Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. Enter your answer as percentage, rounded to one decimal place (e.g. .0248563 to 2.5%). 2. Assume that the credit sales for 2019 are $1,200,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of losses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. Round your answer to the nearest dollar.
Exercise 5-65 (Algorithmic) Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Losses from Year Credit Sales Uncollectible Accounts* 2015 $869,000 $10,625 2016 952,000 14,840 2017 1,083,000 16,790 2018 1,189,000 16,850 *Losses from uncollectible accounts are the actual losses related to sales of that year (rather than write-offs of that year). Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. Enter your answer as percentage, rounded to one decimal place (e.g. .0248563 to 2.5%). 2. Assume that the credit sales for 2019 are $1,200,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of losses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. Round your answer to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Exercise 5-65 (Algorithmic)
Average Uncollectible Account Losses and Bad Debt Expense
The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts:
Losses from
Year
Credit Sales
Uncollectible Accounts*
2015
$869,000
$10,625
2016
952,000
14,840
2017
1,083,000
16,790
2018
1,189,000
16,850
*Losses from uncollectible accounts are the actual losses related to sales of that year (rather than write-offs of that year).
Required:
1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. Enter your answer as percentage, rounded to one decimal place (e.g. .0248563 to 2.5%).
2. Assume that the credit sales for 2019 are $1,200,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of losses from uncollectible accounts for 2019 credit sales.
Determine the bad debt expense for 2019 using the percentage of credit sales method. Round your answer to the nearest dollar.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feb5e64a4-b102-4b8b-8228-3ff462b2c7bb%2F4bdacb84-8135-47b4-a099-cd449b303b1f%2Fmmbdtd.png&w=3840&q=75)
Transcribed Image Text:Exercise 5-65 (Algorithmic)
Average Uncollectible Account Losses and Bad Debt Expense
The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts:
Losses from
Year
Credit Sales
Uncollectible Accounts*
2015
$869,000
$10,625
2016
952,000
14,840
2017
1,083,000
16,790
2018
1,189,000
16,850
*Losses from uncollectible accounts are the actual losses related to sales of that year (rather than write-offs of that year).
Required:
1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. Enter your answer as percentage, rounded to one decimal place (e.g. .0248563 to 2.5%).
2. Assume that the credit sales for 2019 are $1,200,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of losses from uncollectible accounts for 2019 credit sales.
Determine the bad debt expense for 2019 using the percentage of credit sales method. Round your answer to the nearest dollar.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education