The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $400,000; allowance for uncollectible accounts at the beginning of the year, $29,000 (credit balance); credit sales during the year, $1,450,000; accounts receivable written off during the year, $20,000; cash collections from customers, $1,350,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales. 1. Calculate bad debt expense for the year. 2. Calculate the year-end balance in the allowance for uncollectible accounts. Answer is complete but not entirely correct. 1. Bad debt expense $ 48,600 2. Ending balance $ 57,600
The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $400,000; allowance for uncollectible accounts at the beginning of the year, $29,000 (credit balance); credit sales during the year, $1,450,000; accounts receivable written off during the year, $20,000; cash collections from customers, $1,350,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales. 1. Calculate bad debt expense for the year. 2. Calculate the year-end balance in the allowance for uncollectible accounts. Answer is complete but not entirely correct. 1. Bad debt expense $ 48,600 2. Ending balance $ 57,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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, $400,000; allowance for uncollectible accounts at the beginning of the year,
$29,000 (credit balance); credit sales during the year, $1,450,000; accounts receivable written off during
the year, $20,000; cash collections from customers, $1,350,000. Assuming the company estimates bad
debts at an amount equal to 2% of credit sales.
1. Calculate bad debt expense for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.
Answer is complete but not entirely correct.
1. Bad debt expense $
48,600
2. Ending balance
$
57,600
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