Ask Question
19 October, 14:23

Jay Inc. estimates uncollectible accounts using the percentage-of-receivables method and expects that 3.5% of outstanding receivables will be uncollectible for 2016. The balance in Accounts Receivable is $243,000, and the Allowance for Doubtful Accounts has a credit balance of $4,300 before adjustments at year-end. The Bad Debt Expense for 2016 will be:

Select one:

a. $8,505

b. $5,423

c. $4,205

d. $4,300

+2
Answers (1)
  1. 19 October, 17:07
    0
    c. $ 4,205

    Explanation:

    Computation of Estimated uncollectible accounts

    Accounts Receivable balance $ 243,000

    Percentage of outstanding receivable considered uncollectible 3.5 %

    Uncollectible accounts balance = $ 243,000 * 3.5 % $ 8,505

    Existing balance in uncollectible account $ (4,300)

    Bad debts expense for the year $ 4,205
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Jay Inc. estimates uncollectible accounts using the percentage-of-receivables method and expects that 3.5% of outstanding receivables will ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers