Question

Company uses the​ percent-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $ 150 comma 000​, and management estimates 3​% will be uncollectible. Kolker ​Company's balance of Allowance for Uncollectible Accounts after​ adjustments, was $ 6 comma 000. The following​ year, Kolker Company wrote off $ 3 comma 000 of old receivables as uncollectible. What is the balance in the Allowance account​ now?

Answer 1

allowance for Uncllectible accounts 3,000 after write-off

Step-by-step explanation:

There is a trick on the question, notice we are given the value of the allwoance after adjustment at 6,000

This means it was already adjusted for the bad debt expense and this is the year-end balance already.

Then, we are given next year information about a 3,000 write.off

and which is the value after that.

So, after write-off the allwoance balance will be:

Allowance beginning 6,000

write-off (3,000)

ending 3,000