Question

At December 31, year 1, Gasp Co.'s allowance for uncollectible accounts had a credit balance of $30,000. During year 2, Gasp wrote off uncollectible accounts of $45,000. At December 31, year 2, an aging of the accounts receivable indicated that $50,000 of the December 31, year 2, receivables may be uncollectible. What amount of allowance for uncollectible accounts should Gasp report in its December 31, year 2, balance sheet?
A. $20,000B. $25,000C. $35,000D. $50,000

Answer 1

Answer:

What amount of allowance for uncollectible accounts should Gasp report in its December 31, year 2, balance sheet?

Balance sheet_____ 35000

Explanation:

Beggining balance 30000

Wrotte off_______ 45000

Difference_______ -15000

 

Uncollectilble calculate 50000

Balance sheet_____ 35000

The allowance for doubtful accounts is a contra-asset account that records the amount of receivables expected to be uncollectible. The allowance is established in the same accounting period as the original sale, with an offset to bad debt expens

Answer 2

Answer:

Un-Collectibles accounts at (end)= $35000

Explanation:

(Open) = Allowance for doubtful debts = 30000

During the years allowance for bad debts are written off is = 45000

and 50000 further allowance created.

- entry of written of allowance: Dr Allowance for bad debts  45000

                                                     Cr       Account receivable                 45000.

- Dr Bad debts expense  50000

            Cr   Allowance for bad debts    50000

    ( To record allowance for bad debts)

- Allowance for uncollectible account (end)= 30000-45000+50000

                                                                         = $35000.