Question

Estimating Uncollectible Accounts and Reporting Receivables over Multiple Periods
Barth Company, which has been in business for three years, makes all of its sales on credit and does not offer cash discounts. Its credit sales, customer collections, and write-offs of uncollectible accounts for its first three years follow:

Year	Sales	Collections	Accounts Written Off
2015	$751,000	$733,000	$5,300
2016	876,000	864,000	5,800
2017	972,000	938,000	6,500

Barth uses the allowance method of recognizing credit losses that provides for such losses at the rate of 1% of sales. (This means the allowance account is increased by 1% of credit sales regardless of any write-offs and unused balances.)

What amount for accounts receivable is reported on its balance sheet at the end of 2017?
Answer

What total amount of bad debts expense appears on its income statement for each of the three years?
2015 Answer
2016 Answer
2017 Answer

What amount for allowance for uncollectible accounts is reported on its balance sheet at the end of 2017?
Answer

Answer 1

1	$46,400
	Working
	Sales	Collection	Receivable	Accounts Written Off	Receivable(Net)
	$751,000	733000	$18,000	5300	$12,700
	$876,000	864000	$12,000	5800	$6,200
	$972,000	938000	$34,000	6500	$27,500
		Accounts receivable at the end of 2017			$46,400
2
	Year	Sales	Bad debt expense
	2015	$751,000	$7,510
	2016	$876,000	$8,760
	2017	$972,000	$9,720
3	$17,600