Question

e percent-of- P% of credits e for Uncolled Consider each of the following two independent situations. 1. Using the percent-of-sales method, calculate the amount of Uncollectible-Account Expense if Apple Corporation estimates its uncollectible-account expense using a rate of 5% of credit sales. What is the ending balance of the Allowance for Uncollectible Accounts under this scenario? 2. Now assume that Apple Corporation uses the aging-of-receivables method. Apple Corporation estimates that its Allowance for Uncollectible Accounts should have a credit balance of $22,000. Calculate the amount of its Uncollectible-Account Expense. What is the ending balance of the Allowance for Uncollectible Accounts under this scenario? Print Done the edit fields a Clear All o see what to study next, go to your Study Plan. o e @ : 9

Answer 1

1

Uncollectible accounts expense = 490000*5%= $24500

Allowance for Uncollectible accounts balance = 13000+24500 = $37500

Apple Corporation has $24500 of uncollectible account expense using the percent of sales method. The ending balance of Allowance for Uncollectible Accounts is $37500 under this scenario.

2

Uncollectible accounts expense = 22000-13000 = $9000

Allowance for Uncollectible accounts balance = $22000

Apple Corporation has $9000 of uncollectible account expense using the aging of receivables method. The ending balance of Allowance for Uncollectible Accounts is $22000 under this scenario.