Question

Chandler Inc. estimates that an allowance of $14,400 is required on its accounts receivable balance of $288,000 as of December 31 of year 1.

a) 5%
b) 10%
c) 15%
d) 20%

Answer 1

To calculate the estimated allowance for accounts receivable balance, multiply the balance by the given percentage.

Step-by-step explanation:

The question is asking to determine the estimated allowance for accounts receivable balance based on a given percentage. To find the allowance, we multiply the accounts receivable balance ($288,000) by the given percentage. Let's calculate it for each option:

• a) 5%: $288,000 * 0.05 = $14,400
• b) 10%: $288,000 * 0.10 = $28,800
• c) 15%: $288,000 * 0.15 = $43,200
• d) 20%: $288,000 * 0.20 = $57,600

Therefore, the estimated allowance for a balance of $288,000 would be:

• a) 5%: $14,400
• b) 10%: $28,800
• c) 15%: $43,200
• d) 20%: $57,600