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During Year 1, The Bon March Department Store had total sales of $2,500,000 of which 70% were on credit. The beginning balance in Accounts Receivable
During Year 1, The Bon March Department Store had total sales of $2,500,000 of which 70% were on credit. The beginning balance in Accounts Receivable (on January 1 of Year 1) was $130,000. The Beginning balance in Allowance for Bad Debt (on January 1 of Year 1) was $20,000. The amount of accounts written off as uncollectible during the year was $21,000. The following again of Accounts Receivable is for The Bon March Company at the end of the Year 20X1. Overall Less than 30 days 31 days to 60 days 61 days to 90 days Over 90 days Total $412,000 $296,000 $60,000 $26,000 $30.000 The Bon March Company developed the following bad debt information from its own past experience: Age of Account Less than 30 days 31 to 60 days Percent Ultimately Uncollectible 2% 14% 61 to 90 days 32% Over 90 days 85% The Bon March Company uses the aging method to determine its ending Allowance for Bad Debt balance. What is the appropriate Allowance for Bad Debt balance as of the end of Year 1? O $25.500 O $48,140 $45,140 O $54,000 O $52,180 O $50,000
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