The following information relates to a company\'s accounts receivable: accounts

Question

The following information relates to a company's accounts receivable: accounts receivable balance at the beginning of the year $300,000: allowance for uncollectible accounts at the beginning of the year, $25.000 (credit balance): credit sales during the year, $1,500,000: accounts receivable written off during the year, $16,000; cash collections from customers, $1.450,000. Assuming the company estimates bad debts at an amount equal to 2% of credit sales 1. Calculate bad debt expense for the year ok Bad debt expense nt nces 2. Calculate the year-end balance in the allowance for uncollectible accounts. g balance

Explanation / Answer

1.

2.

Credit sales $ 1,500,000 Estimated % baddebts on credit sales 2% baddebts expenses ($1,500,000*2%) $        30,000

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