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At the end of the current year before adjusting entries), Donut Corporation had a balance of $80,000 in Accounts Receivable and a credit balance of

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At the end of the current year before adjusting entries), Donut Corporation had a balance of $80,000 in Accounts Receivable and a credit balance of $7,000 in Allowance for Uncollectible Accounts. Service revenue (all on credit) for the year totaled $470,000. Read the requirements. Requirement 1. Using the percent-of-sales method, calculate the amount of Uncollectible-Account Expense if Donut 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? of uncollectible-account expense using the percent-of-sales method. The Donut Corporation has ending balance of the Allowance for Uncollectible Accounts is under this scenario. Requirement 2. Now assume that Donut Corporation uses the aging-of-receivables method. Donut Corporation estimates that its Allowance for Uncollectible Accounts should have a credit balance of $19,000. Calculate the amount of its Uncollectible-Account Expense. What is the ending balance of the Allowance for Uncollectible Accounts under this scenario? of uncollectible-account expense using the aging-of-receivables method. Donut Corporation has The ending balance of the Allowance for Uncollectible Accounts is under this scenario. Requirements Consider each of the following two independent situations. 1. Using the percent-of-sales method, calculate the amount of Uncollectible-Account Expense if Donut 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? 2. Now assume that Donut Corporation uses the aging-of-receivables method. Donut Corporation estimates that its Allowance for Uncollectible Accounts should have a credit balance of $19,000. 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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