The following information relates to a company\'s accounts receivable accounts r
ID: 2510567 • Letter: T
Question
The following information relates to a company's accounts receivable accounts receivable balance at the beginning of the year $460,000 allowance for uncollectible accounts at the beginning of the year $35,000 (credit balance). credit sales during the year $1750.000, accounts receivable written off during the year $26.000, cash collections from customers. S1.900000 Assuming the company estimates that future bad debts will equal 8% of the year-end balance in accounts receivable 1. Calculate the year-end balance in the allowance for uncollectible accounts 2. Calculate bad debt expense for the year Ending balance 2 Bad debt expense 220wg A S D F N MExplanation / Answer
1.Year End Balance in the allowance for uncollectible accounts = $31,720
Year end balance in Accounts Receivable = Beginning balance of accounts receivable + Credit sales - write-offs - Cash collections
= 460000 + 1750000 – 26000 – 1900000
= $2,84,000
Bad Debt = $2,84,000 * 8% = $22,720
year-end balance in the allowance for uncollectible accounts
= Beginning balance in the uncollectible accounts + bad debts during the year – accounts receivable written off
= $35,000 + $22,720 -$26,000
= $31,720
2.Bed Debt Expense for the year = $22,720
Bad Debt Expenses = $2,84,000 * 8% = $22,720
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