Question

The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry...

The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense. The​ company's management estimates that 3​% of net credit sales will be uncollectible for the year 2017. Net credit sales for the year amounted to $260,000. What will be the balance of Allowance for Bad Debts on the December​ 31, 2017 balance​ sheet?

a. $7,800

b. $9,800

c. $7,740

d. $2,000

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Allowance for bad debts, unadjusted = $2,000

Net credit sales = $260,000

Percentage uncollectibles = 3% of net credit sales

Bad debt expense = Net credit sales x Percentage uncollectibles

= 260,000 x 3%

= $7,800

Allowance for bad debts, ending = Allowance for bad debts, unadjusted + Bad debt expense

= 2,000+7,800

= $9,800

The balance of Allowance for Bad Debts on the December​ 31, 2017 balance​ sheet = $9,800

Correct option is b.

Please give a positive rating if you are satisfied with this solution and if you have any query kindly ask.

Thanks!!!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Allowance for Bad Debts account has a credit balance of 2.000 dollar . The companys...
The Allowance for Bad Debts account has a credit balance of 2.000 dollar . The companys management estimates that %2 of net credit sales will be uncollectible for the year 2015. Net credit sales for the year amounted to 250,000.What will be the amount of Bad Debts Expense reported on the income statement for 2015 ?
16. The Allowance for Bad Debts account has a debit balance of $7,000 before the adjusting...
16. The Allowance for Bad Debts account has a debit balance of $7,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $15,000. What amount of bad debts expense will be reported on the income statement? 19. In reviewing the T-account for Accounts Receivable, you find that the beginning balance is zero, the total increases are $4,900 and...
the vaslor corporation has a $4,300 credit balance in the allowance for Uncollectible Accounts account before...
the vaslor corporation has a $4,300 credit balance in the allowance for Uncollectible Accounts account before any adjusting journal entry has been made. based on prior experience the credit department estimates that 1.6% of sales are uncollectible. net sales for the year are $1,122,000. an aging analysis was also prepared and the aging result was $20,000. prepare the appropriate journal entry to record uncollectible accounts expense if the percentage of net sales method is used. prepare the appropriate journal entry...
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning...
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2016, the allowance account had a credit balance of $5,796. Credit sales for 2016 totaled $479,685 and the year-end accounts receivable balance was $40,234. During this year, $5,429 in receivables were determined to be uncollectible and were written off. Manda Panda anticipates that 2% of all credit sales will ultimately become uncollectible. What is the balance in the allowance for bad debts Manda...
At December 31, 2019 Washington Company had a credit balance of $2000 in its allowance for...
At December 31, 2019 Washington Company had a credit balance of $2000 in its allowance for uncollectible account (allowance for bad debts). Washington using an aging of accounts receivable determined that the allowance in the allowance account at the end of 2019 should be $7000. A. What entry should Washington make to adjust the balance in allowance account at year end? B. If, instead, Washington used the percentage of sales approach what would the bad debt expense entry be if...
USS Navy, Inc. uses the allowance method to account for bad debts.  USS Navy had the...
USS Navy, Inc. uses the allowance method to account for bad debts.  USS Navy had the following information after all entries except bad debt expense for the year. Debit balance in Accounts Receivable, $6,500 Credit Sales of $24,000 Credit balance in Allowance for Doubtful Accounts, $12 Navy estimates 6% of outstanding receivables will be uncollectible. 1)How much should be recorded as bad debt expense? 2) What is the net realizable value of accounts receivable?
The Hernandez Corporation has a $3,100 debit balance in the Allowance for Uncollectible Accounts account before...
The Hernandez Corporation has a $3,100 debit balance in the Allowance for Uncollectible Accounts account before any adjusting journal entry has been made. Based on prior experience the credit department estimates that 2.5% of sales are uncollectible. net sales for the year are $998,600. An aging analysis was also prepared and the aging result was $24,000. Prepare the appropriate journal entry to record uncollectible accounts expense if the Percentage of Net Sales method is used. Prepare the appropriate journal entry...
1. on January 1, 2016, the balance in buying companies allowance for bad debts account was...
1. on January 1, 2016, the balance in buying companies allowance for bad debts account was $13,329. During the first 11 months of the year bad debts expense of $21,037 was recognized. The balance in the allowance for bad that's account at November 30, 2016 was $9807. What was the total of accounts written off during the first 11 months? Bad debts write off= 2. as the result of a comprehensive analysis, it is determined that the December 31, 2016,...
For their fiscal year ended December 31, 2017, the Zurich Inc. had credit sales of $750,000....
For their fiscal year ended December 31, 2017, the Zurich Inc. had credit sales of $750,000. At year end, the unadjusted trial balance shows a credit balance of $1,958 in the Allowance for Doubtful Accounts, and $140,000 in Accounts Receivable. The credit manager prepared an aging schedule of accounts receivable and estimates that $5,200 will prove to be uncollectible. On March 4, 2018 the credit manager authorizes a write off of the $2,000 balance owed by Francis Ltd.. Instructions (a)    ...
Millennium Associates records bad debt using the allowance, balance sheet method. They recorded $299,420 in accounts...
Millennium Associates records bad debt using the allowance, balance sheet method. They recorded $299,420 in accounts receivable for the year, and $773,270 in credit sales. The uncollectible percentage is 3.2%. On November 22, Millennium Associates identifies one uncollectible account from Angel’s Hardware in the amount of $3,650. On December 18, Angel’s Hardware unexpectedly pays its account in full. Record journal entries for the following. A.Year-end adjusting entry for 2017 bad debt B.November 22, 2018 identification entry C.Entry for payment on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT