Question

During the​ year, credit sales amounted to $ 820 comma 000$820,000. Cash collected on credit sales amounted to $ 760 comma 000$760,000​, and $ 18 comma 000$18,000 has been written off. At the end of the​ year, the company adjusted for bad debts expense using the percentminus−ofminus−sales method and applied a​ rate, based on past​ history, of 2.52.5​%. The ending balance of Accounts Receivable is​ ________.

Answer 1

Account Receivable 42,000

Allowance (20,500)

Net 21,500

Step-by-step explanation:

credit sales: 820,000

cash collected (760,000)

write-off (18,000)

Account Receivable 42,000

allowance for bad debt expense

820,000 x 2.5% = 20,500

The accout receivable gross balance will be 42,000

and the net will be 42,000 - 20,500 = 21,500