Ace computing company On January 1, 2012, the Accounts Receivable and the Allowa

Question

Ace computing company On January 1, 2012, the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $40,000 and $1,500 respectively. During the year, the company reported $80,000 of credit sales. There were $500 of receivables written off as uncollected in 2012. Cash collections of receivables amounted to $78,200. The company estimates that it will be unable to collect 4% of the year-end accounts receivable balance. Refer to the Ace Computing Company. The amount of bad debts expense recognized in the 2012 income statement will be: a. $652 b. $1,450 c. $1,652 d. $142

Explanation / Answer

a

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