& You received no cred The following information relates to a company\'s account

Question

& You received no cred 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 balancel: credit sales during the year, $1.500,000, accounts receivable written off during the year. S16,000 cash collections from customers, $1450,000 Assuming the company estimates that future bad debts will equal 10% of the year-end balance in accounts receivable. 1. Caiculate the year-end balance in the allowance for uncolfectible accounts. ok nces2.Calculate bad debt expense for the year Bad debt e

Explanation / Answer

1) Year end balance of allowance for doubtful accounts :

Year end balance of the allowance for doubtful accounts = 334000*10% = 33400

2) Bad debt expense = 33400-(25000-16000) = 24400

Beginning balance 300000 Add: Credit sales 1500000 Less: Account receivable written off (16000) Less: Cash collection (1450000) Ending balance of account receivable 334000

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