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At the end of the current year (before adjusting entries), Vacay Corporation had a balance of $86,000 in Accounts Receivable and a credit balance of
At the end of the current year (before adjusting entries), Vacay Corporation had a balance of $86,000 in Accounts Receivable and a credit balance of $13,000 in Allowance for Uncollectible Accounts. Service revenue (all on credit) for the year totaled $430,000. Read the requirements. Using the percent-of-sales method, calculate the amount of Uncollectible-Account Expense if Vacay Corporation estimates its uncollectible-account expense using a rate of 5% of credit sales. What is the ending balance of the Allowance for Uncollectible Accounts under this scenario? Now assume that Vacay Corporation uses the aging-of-receivables method. Vacay Corporation estimates that its Allowance for Uncollectible Accounts should have a credit balance of $27,000. Calculate the amount of its Uncollectible-Account Expense. What is the ending balance of the Allowance for Uncollectible Accounts under this scenario
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