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30 January, 06:53

At January 1, 2013, Simpson Co. had a credit balance of $260,000 in its allowance for uncollectible accounts. Based onpast experience. 2 percent of Simpson's credit sales have been uncollectible. During 2013. Simpson wrote off 5325.000 ofaccounts receivable. Credit sales for 2013 were $9.000,000. In its December 31. 2013. balance sheet, what amount shouldSimpson report as allowance for uncollectible accounts? a. 5115.000b. 5180.000c. $245,000d. $440,000

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  1. 30 January, 09:58
    0
    Option (a) is correct.

    Explanation:

    Given that,

    Allowance for uncollectible accounts balance January 1 = $260,000

    Accounts receivable Written off = $325,000

    Credit sales for 2013 = $9,000,000

    Percent of Credit sales uncollectible = 2%

    Allowance for uncollectible accounts balance December 31:

    = Allowance for uncollectible accounts balance January 1 - Written off + Bad debts expense

    = $260,000 - $325,000 + (,9000,000 * 2%)

    = $260,000 - $325,000 + $180,000

    = $115,000
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Home » Business » At January 1, 2013, Simpson Co. had a credit balance of $260,000 in its allowance for uncollectible accounts. Based onpast experience. 2 percent of Simpson's credit sales have been uncollectible. During 2013. Simpson wrote off 5325.
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