Question

Hall Co.'s allowance for uncollectible accounts had a credit balance of $24,000 on December 31, 2003. During 2004, Hall wrote off uncollectible accounts of $96,000. The aging of accounts receivable indicated that a $100,000 allowance for doubtful accounts was required on December 31, 2004. What amount of uncollectible accounts expense should Hall report for 2004

Answer 1

Answer:

Uncollectibe Accounts expense should be $ 172,000

Explanation:

To calculate the expense for the Uncollectible Account expense, we need to determine two amounts, firstly the expense to be recorded for the write off and the amount that is required at year end.

Write off for the year                                                            $ 96,000

Available balance at beginning of year                              $ 24,000

Uncollectible Accounts expense to cover write off          $  72,000

Uncollectible Accounts expense to cover year end

balance                                                                                 $ 100,000

Total uncollectible Accounts expense for the year          $  172,000