During the year, credit sales amounted to $800,000. Cash collected on credit sal
ID: 2454699 • Letter: D
Question
During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000, and $18,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance of Accounts Receivable would be:
$80,000
$40,000
$18,000
$62,000
At the beginning of 2015, Peter Dots has the following ledger balances: Allowance for Bad Debts 5,000 Accounts Receivable Bad Debts Expense 40,000 During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000, and $18,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance of Accounts Receivable would be: $80,000 $40,000 $18,000 $62,000Explanation / Answer
1)correct option is "D" - $62000
[Ending balance = beginning +sales -collection -writeoff]
=40000+800000-760000-18000 = 62000
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