If Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales, $159,000 Credit sales, $459,000. Flyer estimates bad debt expense assuming that 2% of credit sales have historically been uncollectible. The balance in the allowance for doubtful accounts after bad debt expense is recorded will be: $11,280
First step is to determine the estimated bad debt expense
Bad debts expense=($459,000×2%)
Bad debt expense=$9,180
Now let determine the balance in the allowance for doubtful accounts after bad debt expense is recorded
Balance in allowance for doubtful accounts=$9,180+$2,100
Balance in allowance for doubtful accounts=$11,280
Inconclusion if Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales, $159,000 Credit sales, $459,000. Flyer estimates bad debt expense assuming that 2% of credit sales have historically been uncollectible. The balance in the allowance for doubtful accounts after bad debt expense is recorded will be: $11,280
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