Shore Co. provides for doubtful accounts based on 3% of credit sales. The following data are available of 2014. Credit sales during 2014 2,400,000 Allowance for doubtful accounts 1/1/14 17,000 Collection of accounts written off in prior years (customer credit was reestablished) 8,000 Customer accounts written off as 30,000 uncollectible during 2014. What is the balance in Allowance for Doubtful Accounts at December 31, 2014.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Shore Co. provides for doubtful accounts based on 3% of credit sales. The following data are available of 2014.
Credit sales during 2014 2,400,000
Allowance for doubtful accounts 1/1/14 17,000
Collection of accounts written off in prior years
(customer credit was reestablished) 8,000
Customer accounts written off as 30,000
uncollectible during 2014.
What is the balance in Allowance for Doubtful Accounts at December 31, 2014.
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