Allowance Method The Huntington Company, which has been in business for three years, makes all of its sales on account and does not offer cash discounts. The firm's credit sales, collections from customers, and write-offs of uncollectible accounts for the three-year period are summarized below:
Year |
Sales |
Collections |
Accounts Written Off |
---|---|---|---|
2012 | $630,000 | $574,000 | $4,200 |
2013 | 800,000 | 760,000 | 6,700 |
2014 | 870,000 | 844,000 | 7,300 |
Required
If the Huntington Company had used the allowance method of
recognizing credit losses and had provided for such losses at the
rate of 1.2 percent of credit sales, what amounts in Accounts
Receivable and the Allowance for Doubtful Accounts would appear on
the firm's balance sheet at the end of 2014? What total amount of
bad debts expense would have appeared on the firm's income
statement during the three year period?
Balance in Accounts Receivable at year end, 2014 | Answer |
Allowance for Doubtful Accounts Balance at year end 2014 | Answer |
Bad Debts Expense | Answer |
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