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19 September, 20:00

On January 1, 2014 the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $30,000 and $500, respectively. During the year the company reported $75,000 of credit sales. There were $550 of receivables written-off as uncollectible in 2014. Cash collections of receivables amounted to $74,550. The company estimates that it will be unable to collect one percent (1%) of credit sales. The amount of uncollectible accounts expense recognized in the 2014 income statement will be? $700 $300. $750. $550.

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  1. 19 September, 20:01
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    correct option is $750

    Explanation:

    solution

    we know here that Net balance of opening accounts receivable is

    Net balance of opening accounts receivable = $30000 - $500

    Net balance of opening accounts receivable = $29500

    and

    Credit sales during the year is here $7500 0

    and Cash payments received = 74550

    so

    uncollecectible account expenses = credit sales * % of sale uncollectible

    so uncollecectible account expenses = $75000 * 1%

    uncollecectible account expenses = $750

    so correct option is $750
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