Question

During its first year of operations, Ellison, Inc. bills customers $18,000 for the services it provided. At the end of the year, $6,000 remains due from customers. The company’s credit manager estimates that 10% of the total year-end accounts receivable will not be collected. The company’s estimate of uncollectible accounts is

Answer 1

The answer is: $600

Step-by-step explanation:

Ellison Inc.'s total sales for the year were $18,000. By the end of the year $12,000 had been paid in cash and $6,000 still remained as accounts receivable. Out of those $6,000, the credit manager estimates 10% will be be noncollectible, that amounts to $600 ($6,000 x 10%).