Question
#2 Corona Company has credit sales of $4.60 million for the year 2019. The company estimates that 2% of sales will be uncollectible. On December
#2 Corona Company has credit sales of $4.60 million for the year 2019. The company estimates that 2% of sales will be uncollectible. On December 31, 2019, the companys Allowance for Doubtful Accounts has an unadjusted credit balance of $13,164. Corona prepares a schedule of its December 31, 2019, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:
December 31, 2019 Accounts Receivable | Age of Accounts Receivable | Expected Percent Uncollectible |
$720,000 | Not yet due | 1.05 % |
252,000 | 1 to 30 days past due | 1.80 |
49,600 | 31 to 60 days past due | 6.30 |
14,100 | 61 to 90 days past due | 31.75 |
2,850 | Over 90 days past due | 66.00 |
Assuming the company used the percent of sales method the amount that should be recorded for bad debt expense on December 31, 2019 is ____________________.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started