Question

As of January 1, 2021, Barley Co. had a credit balance of $539,000 in its allowance for uncollectible accounts. Based on experience, 1% of Barley's gross accounts receivable have been uncollectible. During 2021, Barley wrote off $669,000 of accounts receivable. Barley's gross accounts receivable as December 31, 2021 is $18,950,000.In its December 31, 2021, balance sheet, what amount should Barley report as allowance for uncollectible accounts

Answer 1

Answer:

$189,500

Explanation:

Calculation to determine what amount should Barley report as allowance for uncollectible accounts

Using this formula

Allowance for uncollectible Accounts=Barley's gross accounts receivable percentage*Barley's gross accounts receivable

Let plug in the formula

Allowance for uncollectible Accounts= 1%*$18,950,000

Allowance for uncollectible Accounts= $189,500

Therefore The amount that Barley should report as allowance for uncollectible accounts will be $189,500