Question
The following information relates to a company’s accounts receivable: accounts receivable balance at the beginning of...
The following information relates to a company’s accounts
receivable: accounts receivable balance at the beginning of the
year, $450,000; allowance for uncollectible accounts at the
beginning of the year, $34,000 (credit balance); credit sales
during the year, $1,700,000; accounts receivable written off during
the year, $25,000; cash collections from customers, $1,850,000.
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.
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