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dexar [7]
3 years ago
15

On January 1, 2017, Accounts Receivable and Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000

and $550, respectively. During the year, the company reported $70,000 of credit sales. There were $400 of receivables written off as uncollectible in 2017. Cash collections of receivables amounted to $74,700. The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance. The amount of bad debts expense recognized in the 2017 income statement will be: ________:
(A) $545
(B) $595
(C) $745
(D) $795
Business
1 answer:
kupik [55]3 years ago
8 0

Answer:

(C) $745

Explanation:

The computation is given below:

For computing the bad debt  expense, first we have to determine the ending account receivable balance which is shown below:

Ending account receivable balance = Beginning account receivable + credit sales - collections - written off amount

= $20,000 + $70,000 - $74,700 - $400

= $15,300

So, the bad debt expense is

= Ending account receivable × given percentage

= $15,300 × 5%

= $745

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borrow funds to buy out the firm's stockholders. 

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I hope my answer helps you

4 0
3 years ago
Floating rate bonds are most likely to be popular with investors when it is anticipated that:_________.
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The following three independent sets of facts relate to contingent liabilities: 1. In November of the current year an automobile
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Comment

Step 3 of 3

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If shell decided to open a new service station I a rural area of uk, which was not well serviced with filling stations, it would
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Explanation:

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