Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Business Risk Approach

Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg

8th edition

538476230, 978-0538476232

More Books

Students also viewed these Accounting questions

Question

Define Administration?

Answered: 1 week ago

Question

=+10. Did you clearly project the brand's USP?

Answered: 1 week ago