Answer to Part A:
Estimated Uncollectible = 2% * Net Credit Sales
Estimated Uncollectible = 2% * $3,600,000
Estimated Uncollectible = $72,000
Bad Debt Expense = Estimated Uncollectible
Bad Debt Expense = $72,000
Adjusted Credit Balance of Allowance for Doubtful Accounts =
Unadjusted Credit Balance of Allowance for Doubtful Accounts + Bad
Debt Expense
Adjusted Credit Balance of Allowance for Doubtful Accounts =
$32,000 + $72,000
Adjusted Credit Balance of Allowance for Doubtful Accounts =
$104,000
Net Accounts Receivable = Accounts Receivable - Allowance for
Doubtful Accounts
Net Accounts Receivable = $960,000 - $104,000
Net Accounts Receivable = $856,000
Answer to Part B:
Estimated Uncollectible = $110,000
Bad Debt Expense = Estimated Uncollectible - Unadjusted Credit
Balance of Allowance for Doubtful Accounts
Bad Debt Expense = $110,000 - $72,000
Bad Debt Expense = $38,000
Adjusted Credit Balance of Allowance for Doubtful Accounts = $110,000
Net Accounts Receivable = Accounts Receivable - Allowance for
Doubtful Accounts
Net Accounts Receivable = $960,000 - $110,000
Net Accounts Receivable = $850,000
Problem 2-Uncollectible Accounts Receivable (10 points total) The Accounts Receivable balance for Crown Corporation is $960,000...
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