ABC Inc. sells to wholesalers on term 2/15, n/30. ABC has no cash sales but 50% of
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Question:
ABC Inc. sells to wholesalers on term 2/15, n/30. ABC has no cash sales but 50% of ABC's customers take advantage of the discount. ABC uses the gross method of recording sales and trade receivables. An analysis of ABC's trade receivables balances at December 31, 2017, revealed the following:
AGE AMOUNT COLLECTIBLE
0-15 days 100,000 100%
16-30 days 60,000 95%
31-60 days 5,000 90%
Over 60 days 2,500 500
In its December 31, 2017, statement of financial position, what amount should ABC report as allowance for discount?
- 3,350
- Answer not given
- 3,240
- 4,000
- 2,000
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