Question

Urban Boat Real Estate reported the following information for 2020 (Click the icon to view the information.) 1. If uncollectible accounts are determined by the percent-of-sales method to be 4 percent of net credit sales, what is the bad debt expense for 20202 2. runcollectible accounts are determined by the aging of receivables to be $3,500, what is the amount of net accounts receivable after adjusting entries for 2020? 1. If uncollectible accounts are determined by the percent of sales method to be 4 percent of not credit sales, what is the bad debt expense for 2020? Bad debt expense for 2020 is Data Table - X $ 28,000 Accounts receivable, Jan 1, 2020 Allowance for doubtful accounts, Dec 31, 2020 prior to adjustment Net credit sales during 2020 Collections on account during 2020 Cash sales during 2020 1,200 245,000 95.000 35 000 Print Done

Answer 1

Net credit sales = 245000

Allowance for doubtful account adjusted balance = 4% * 245000

= 12250

Bad debt expense = 12250 - 1200 = 11050

2)

Net account receivable = Gross account receivable - Allowance for doubtful account

= 28000 - 3500

= 24500