The following information is from the 2025 records of Fast Lane Racing Gear: Accounts receivable, December 31, 2025 $42,000 (debit) Allowance for Bad Debts, December 31, 2025 prior to adjustment 1,500 (debit) Net credit sales for 2025 176,000 Accounts written off as uncollectible during 2025 20,000 Cash sales during 2025 27,000 Bad debts expense is estimated by the aging−of−receivables method. Management estimates that $9,000 of accounts receivable will be uncollectible. Calculate the ending balance of Allowance for Bad Debts, after the adjustment for bad debts expense, at December 31, 2025. A. $7,000 B. $5,280 C. $9,000 D. $12,000
The following information is from the 2025 records of Fast Lane Racing Gear: Accounts receivable, December 31, 2025 $42,000 (debit) Allowance for Bad Debts, December 31, 2025 prior to adjustment 1,500 (debit) Net credit sales for 2025 176,000 Accounts written off as uncollectible during 2025 20,000 Cash sales during 2025 27,000 Bad debts expense is estimated by the aging−of−receivables method. Management estimates that $9,000 of accounts receivable will be uncollectible. Calculate the ending balance of Allowance for Bad Debts, after the adjustment for bad debts expense, at December 31, 2025. A. $7,000 B. $5,280 C. $9,000 D. $12,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following information is from the 2025 records of Fast Lane Racing Gear:
|
Accounts receivable, December 31, 2025
|
$42,000
(debit) |
|
Allowance for
prior to adjustment
|
1,500
(debit) |
|
Net credit sales for 2025
|
176,000
|
|
Accounts written off as uncollectible during 2025
|
20,000
|
|
Cash sales during 2025
|
27,000
|
Bad debts expense is estimated by the
accounts receivable will be uncollectible. Calculate the ending balance of Allowance for Bad Debts, after the adjustment for bad debts expense, at December 31, 2025.
aging−of−receivables
method. Management estimates that
$9,000
of $7,000
$5,280
$9,000
$12,000
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