Question

On January 1, 2016 Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2016, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account.

The amount of uncollectible accounts expense recognized on the 2016 income statement is:

Answer 1

$2,080

Step-by-step explanation:

Grande Company Uncollectible Account

Grande Sales on account × Estimated Uncollectible accounts of sales on account.

Hence:

$104,000x 2%

= $2,080

Therefore the amount of uncollectible accounts expense recognized on the 2016 income statement is: $2,080

Answer 2

$2080

Step-by-step explanation:

The amount of uncollectible accounts expense recognized on the 2016 income statement is:

opening balance = $16000

sales made = $104000

amount collected ( cash flow ) = $97000

2%of sales estimated as uncollectible = 2% of 10400 = $2080

balance of receivables = 16000 + 104000 - 97000-2080 = $20920

but the amount of uncollectible accounts expense would be = $2080