Company had the following information in 2014. Accounts receivable 12/31/14. . .

Question

Company had the following information in 2014. Accounts receivable 12/31/14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,000 Allowance for uncollectible account 12/31/14 (before adjustment). . . . . . 800 Credit sales during 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000 Cash sales during 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 Collections from customers on account during 2014. . . . . . . . . . . . . . . . 49,000 Uncollectible accounts are determined by the percent-of-sales method to be 4% of credit sales. How much is uncollectible-account expense for 2014? A. $1,800 B. $280 C. $2,160 D. $800

Explanation / Answer

Answer-  A

Uncollectible accounts are determined by the percent-of-sales method to be 4% of credit sales.

45000*4/100

=1800

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