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OLga [1]
3 years ago
11

The Allowance for Bad Debts account has a credit balance of $ 5 comma 000$5,000 before the adjusting entry for bad debts expense

. Theâ company's management estimates that 22â% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $ 260 comma 000$260,000. What will be the balance of Allowance for Bad Debts on the Decemberâ 31, 2019 balanceâ sheet?
Business
2 answers:
lorasvet [3.4K]3 years ago
5 0

Answer:

62,200

Explanation:

The Allowance for Bad Debts account has a credit balance of $5,000 before the adjusting entry for bad debts expense. The company's management estimates that 22% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $260,000. The balance of Allowance for Bad Debts on the December 31, 2019 balance sheet would be 62,200.

GaryK [48]3 years ago
4 0

Answer:

62,200 allowance ending

Explanation:

allownce 5,000 credit

<u>Because the bad debt is calculate over the sales,</u> the bad debt expense is the result of that estimated, without considering the beginning balance of the allowance.

22% of net credit sales will be uncollectible:

260,000 x 22% = 57,200

<u>Now ending balance will be beginning + uncollectible for the period</u>

5,000 beginning

57,200 uncollectible for the period

62,200 allowance ending

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