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On average, 5% of total accounts receivable has been uncollectible in the past. At the end of the year, balance of accounts receivable is $100,000
On average, 5% of total accounts receivable has been uncollectible in the past. At the end of the year, balance of accounts receivable is $100,000 and the allowance for doubtful accounts has a credit balance of $500. Credit sales during the year were $150,000. Using the aging of accounts receivable method, the estimated bad debt expense would be:
$6,000
$4,500
indeterminable; the aging of accounts receivable method cannot be used, because, based on this information, the percentage of credit sales method should be used.
$5,500
$5,000
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