The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $470,000; allowance for uncollectible accounts at the beginning of the year, $36,000 (credit balance); credit sales during the year, $1,800,000; accounts receivable written off during the year, $27,000; cash collections from customers, $1,950,000. Assuming the company estimates bad debts at an amount equal to 3% of credit sales. 1. Calculate bad debt expense for the year. 2. Calculate the year-end balance in the allowance for uncollectible accounts. 1. Bad debt expense 2. Ending balance
The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year, $470,000; allowance for uncollectible accounts at the beginning of the year, $36,000 (credit balance); credit sales during the year, $1,800,000; accounts receivable written off during the year, $27,000; cash collections from customers, $1,950,000. Assuming the company estimates bad debts at an amount equal to 3% of credit sales. 1. Calculate bad debt expense for the year. 2. Calculate the year-end balance in the allowance for uncollectible accounts. 1. Bad debt expense 2. Ending balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The following information relates to a company's accounts receivable: gross accounts receivable balance at the beginning of the year,
$470,000; allowance for uncollectible accounts at the beginning of the year, $36,000 (credit balance); credit sales during the year,
$1,800,000; accounts receivable written off during the year, $27,000; cash collections from customers, $1,950,000. Assuming the
company estimates bad debts at an amount equal to 3% of credit sales.
1. Calculate bad debt expense for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.
1. Bad debt expense
2. Ending balance
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