The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $320,000, allowance for uncollectible accounts at the beginning of the year, $21,000 (credit balance), credit sales during the year, $1,050,000; accounts receivable written off during the year, $12,000; cash collections from customers, $950,000. Assuming the company estimates that future bad debts will equal 9% of the year-end balance in accounts receivable. 1. Calculate bad debt expense for the year. 2. Calculate the year-end balance in the allowance for uncollectible accounts. 1. Bad debt expense 2. Ending balance.
The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $320,000, allowance for uncollectible accounts at the beginning of the year, $21,000 (credit balance), credit sales during the year, $1,050,000; accounts receivable written off during the year, $12,000; cash collections from customers, $950,000. Assuming the company estimates that future bad debts will equal 9% of the year-end balance in accounts receivable. 1. Calculate bad debt expense for the year. 2. Calculate the year-end balance in the allowance for uncollectible accounts. 1. Bad debt expense 2. Ending balance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year,
$320,000, allowance for uncollectible accounts at the beginning of the year, $21,000 (credit balance), credit sales during the year,
$1,050,000; accounts receivable written off during the year, $12,000; cash collections from customers, $950,000. Assuming the
company estimates that future bad debts will equal 9% of the year-end balance in accounts receivable.
1. Calculate bad debt expense for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.
1. Bad debt expense
2. Ending balance.
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