Question

As of January 1, 2021, Farley Co. had a credit balance of $523,000 in its allowance for uncollectible accounts. Based on experience, 3% of Farley's credit sales have been uncollectible. During 2021, Farley wrote off $636,000 of accounts receivable. Credit sales for 2021 were $19,400,000. In its December 31, 2021, balance sheet, what amount should Farley report as allowance for uncollectible accounts?

Answer 1

Answer:

Balance sheet, what amount should Farley report as allowance for uncollectible accounts?

if we take the final balance of accounts receivable   $582000

If the wrotte off difference affects the final balance and we do not register additional expenses. $469000

Explanation:

Credit balance allownace  523000

Allowance for uncollective 3%

 

Wrotte off                               636000

 

Credit sales                         19400000

Allowance for uncollective              3%

                                             582000

 

 

Credit balance                        523000

Wrotte off                                636000

                                             -113000

 

Allownace for uncollectible      469000