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Valdez company uses the percent of receivables method to estimate uncollectible accounts expense. Valdez began 2011 with balances in accounts receivable and allowance for doubtful accounts of $39,750 and $2,930 (credit), respectively. During the year, the company wrote off $2,620 in uncollectible accounts. In preparation for the company's 2011 estimate, valdez prepared for the following aging schedule. What will valdez record as uncollectible accounts expense for 2011?

a) $2,620
b) $5,550
c) $3,794
d) $2,930

User Josh
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Final answer:

To determine the uncollectible accounts expense for 2011, Valdez company uses the percent of receivables method. They will calculate the total accounts receivable, apply the percentages from the aging schedule, and record the estimated amount as the expense. However, the question does not provide the specific percentages or calculations, so the correct answer cannot be determined.

Step-by-step explanation:

To determine the uncollectible accounts expense for 2011, Valdez company uses the percent of receivables method. This method estimates the amount of accounts receivable that will not be collected based on a percentage. To calculate the expense, Valdez will first calculate the total accounts receivable at the end of the year by adding the beginning balance to the total credit sales made during the year. Then, Valdez will multiply this total by the estimated percentage of uncollectible accounts. In this case, the aging schedule provided will give Valdez the percentages for each age category of accounts receivable. Valdez will apply these percentages to the total accounts receivable to estimate the amount that will not be collected. Finally, Valdez will record this amount as the uncollectible accounts expense for 2011.

Based on the information provided, Valdez began 2011 with accounts receivable of $39,750 and allowance for doubtful accounts of $2,930 (credit). The aging schedule will provide the percentages to estimate the uncollectible accounts expense. However, the specific percentages and calculations are not provided in the question. Therefore, it is not possible to determine the exact uncollectible accounts expense for 2011. The correct answer cannot be determined from the given information.

User Sabbir
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