Question

Using the percentage of net sales method, uncollectible accounts expense for the year is estimated to be $54,000. If the balance of the Allowance for Uncollectible Accounts is an $18,000 credit before adjustment, what is the balance after adjustment?
A) $18,000
B) $54,000
C) $72,000
D) $38,000

Answer 1

Answer:

The correct answer is c) $72,000

Explanation:

(Using the percentage of net sales method)

• Uncollectible accounts expense for the year is estimated to be $54,000

• If the balance of the Allowance for Uncollectible Accounts is an $18,000 credit before adjustment.

$54,000 + $18,000= $72,000

The balance after adjustment is $72,000