Aspen Co. provides for doubtful accts expense at the rate of 3% of credit sales.

Question

Aspen Co. provides for doubtful accts expense at the rate of 3% of credit sales. The following data are available for last year. Allowance for doubtful accts Jan 1 = $54,000 (cr) / Accts written off as uncollectible during the year = $60,000 / Collection of accts written off in prior years (customer credit was re-established) = $15,000 / Credit sales, year-ended Dec 31 = $3,000,000. The allowance for doubtful accounts balance at Dec 31, after adjusting entries, should be (a) $45,000 (b) $99,000 (c) $90,000 (d) $84,000. I'm thinking it should be (c) $90,000??

Explanation / Answer

(b) $99,000

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