Question

During the​ year, credit sales amounted to​ $800,000. Cash collected on credit sales amounted to​ $780,000, and​ $16,000 has been written off. At the end of the​ year, the company adjusted for bad debts expense using the​ percent-of-sales method and applied a​ rate, based on past​ history, of​ 3.5%. The ending balance of Accounts Receivable is​ ________.

Answer 1

Answer:

Bad debt expense = $28000

Ending balance = $4000

Explanation:

given data

Credit sales= $800000

Cash collection = $780,000

Write off = $16,000

rate = 3.5 %

to find out

ending balance of Accounts Receivable is​

solution

first we get Bad debt expense that is express as

Bad debt expense = 800000 × 3.5%

Bad debt expense = $28000

and

Ending balance is express as

Ending balance = Credit sales - Cash collection - Write off     ..............1

put here value

Ending balance = $800000  - $780,000 - $16,000

Ending balance = $4000