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2 November, 16:07

The following information pertains to Oro Corp.: Credit sales for the year ended December 31 $450,000 Credit balance in allowance for uncollectible accounts at January 1 10,800 Bad debts written off during the year 18,000 According to past experience, 3% of Oro's credit sales have been uncollectible. After provision is made for bad debt expense for the year ended December 31, the allowance for uncollectible accounts balance would beA. $6,300

B. $13,500

C. $24,300

D. $31,500

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  1. 2 November, 19:15
    0
    A. $6,300

    Explanation:

    The computation of the ending balance of uncollectible account is shown below:

    = Opening balance of the uncollectible accounts + uncollected amount - bad debt written off

    where,

    uncollected amount = Credit sales * given percentage

    = $450,000 * 3%

    = $13,500

    The other item values would remain the same

    Now put these values to the above formula

    So, the value would equal to

    = $10,800 + $13,500 - $18,000

    = $6,300
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