Y Company obtained the following balances from its computerized accounting information system at the end of...
Y Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments:
Accounts receivable $ 27,000
Allowance for uncollectible accounts (3,000)
Net sales 100,000
Bad debts expense 0
The company estimates that 20% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, the allowance for uncollectible accounts will be:
Y Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments:
Accounts receivable $ 27,000
Allowance for uncollectible accounts (3,000)
Net sales
100,000
Bad debts expense 0
The company estimates that 20% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, the allowance for uncollectible accounts will be:
A.
$(4,800).
B.
$(2,400).
C.
$(20,000).
D.
$(5,400).
The company estimates that 2% of net sales will be uncollectible. After the correct adjusting entry has been made, what is the Net accounts receivable on the
year−end balance sheet?
A.
$22,000
B.
This is a trick question. Accounts receivable appear on the income statement, not the balance sheet.
C.
$24,000
D.
$27,000
Homework Answers
1) Allowance for doubtful account balance after adjusting entry = Account receivable*percent uncollectible
= 27000*20%
Allowance for doubtful account balance after adjusting entry = 5400
So answer is d) ($5400)
2) Bad debt expense = 100000*2% = 2000
Net account receivable = 27000-5000 = 22000
So answer is a) $22000
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