Burnett Corporation had a 1/1/17 balance in the Allowance for Doubtful Accounts

Question

Burnett Corporation had a 1/1/17 balance in the Allowance for Doubtful Accounts of $15,000. During 2017, it wrote off $10,800 of accounts and collected $8,150 on accounts previously written off. The balance in Accounts Receivable was $360,000 at 1/1 and $300,000 at 12/31. Credit sales in 2017 totaled $1.000,000. At 12/31/17, Burnett estimates that 2% of credit sales will prove to be uncollectible. What should Burnett report as its Allowance for Doubtful Accounts at 12/31/17? $ 2,650 $13,350 $6,000 $27,350 $20,000

Explanation / Answer

$27,350

Net of sales 1,000,000 @2% = $20,000

Opening 15,000 - $10,800 written off + 3,150 recovered + 20,000 estimated = $27,350 balance

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