g "At the start of the current year, Minuteman Corporation had a credit balance in the Allowance for Doubtful Accounts of $3,500. During the year a monthly provision of 3% of sales was made for uncollectible accounts. Sales for the year were $1,110,000, and $7,200 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the year. The year-end financial statements should show:"

Question

Business

Jalen Irwin

26 June, 05:30

g "At the start of the current year, Minuteman Corporation had a credit balance in the Allowance for Doubtful Accounts of $3,500. During the year a monthly provision of 3% of sales was made for uncollectible accounts. Sales for the year were $1,110,000, and $7,200 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the year. The year-end financial statements should show:"

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Answers (1)

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Susan Stewart · Answer 1

Answer: Allowance for the doubtful accounts with a credit balance of $29,600

Explanation:

From the information that is provided in the question, the following can be deduced and the year-end financial statements should show:

Allowance for the doubtful accounts with a credit balance will be calculated as: the beginning allowance for the doubtful accounts + (the sales * Provision %) - accounts receivable that were written off.

= $3,500 + ($1,110,000 * 3%) - $7,200

= $3500 + $33300 - $7200

= $36800 - $7200

= $29,600