Mateo Company had the following account balances at December 31, 2018, before recording bad debt expense for the year: Accounts receivable $ 1,400,000 Allowance for uncollectible accounts (credit balance) 22,000 Credit sales for 2018 1,950,000 Mateo is considering the following approaches for estimating bad debts for 2018: Based on 3% of credit sales Based on 6% of year-end accounts receivable What amount should San Mateo charge to bad debt expense at the end of 2018 under each method? Percentage of credit sales Percentage of accounts receivable a. $ 36,500 $ 62,000 b. $ 58,500 $ 62,000 c. $ 58,500 $ 84,000 d. $ 117,000 $ 95,000 A) Option A B) Option B C) Option C D) Option D.
Mateo Company had the following account balances at December 31, 2018, before recording bad debt expense for the year: Accounts receivable $ 1,400,000 Allowance for uncollectible accounts (credit balance) 22,000 Credit sales for 2018 1,950,000 Mateo is considering the following approaches for estimating bad debts for 2018: Based on 3% of credit sales Based on 6% of year-end accounts receivable What amount should San Mateo charge to bad debt expense at the end of 2018 under each method? Percentage of credit sales Percentage of accounts receivable a. $ 36,500 $ 62,000 b. $ 58,500 $ 62,000 c. $ 58,500 $ 84,000 d. $ 117,000 $ 95,000 A) Option A B) Option B C) Option C D) Option D.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
) Mateo Company had the following account balances at December 31, 2018, before recording bad debt expense for the year:
|
|
$ |
1,400,000 |
|
|
Allowance for uncollectible accounts (credit balance) |
|
22,000 |
|
|
Credit sales for 2018 |
|
1,950,000 |
|
Mateo is considering the following approaches for estimating
- Based on 3% of credit sales
- Based on 6% of year-end accounts receivable
What amount should San Mateo charge to bad debt expense at the end of 2018 under each method?
|
|
Percentage of credit sales |
|
Percentage of accounts receivable |
||||
|
a. |
$ |
36,500 |
|
|
$ |
62,000 |
|
|
b. |
$ |
58,500 |
|
|
$ |
62,000 |
|
|
c. |
$ |
58,500 |
|
|
$ |
84,000 |
|
|
d. |
$ |
117,000 |
|
|
$ |
95,000 |
|
- A) Option A
- B) Option B
- C) Option C
- D) Option D.
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