Bradford Plumbing had the following data for a recent year: Credit sales .....................$289,000 Allowance for doubtful accounts,

Question:

Bradford Plumbing had the following data for a recent year:

Credit sales .....................$289,000

Allowance for doubtful accounts, 1/1 (a credit balance) ... 4,120

Accounts receivable, 1/1 ................ 38,700

Collections on account receivable ............ 291,000

Accounts receivable written off ............. 4,620

Bradford estimates that 2.2 percent of credit sales will eventually default.

Required:

1. Compute bad debt expense for the year.

2. Determine the ending balances in accounts receivable and allowance for doubtful accounts.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...