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On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $71,000 and $2,900, respectively. During the
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $71,000 and $2,900, respectively. During the year, Kincaid reported $190,000 of credit sales. Kincaid also wrote off $1,750 of receivables as uncollectible in Year 2. Cash collections of receivables amounted to $227,700. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales. Kincaid's entry required to recognize the uncollectible accounts expense for Year 2 will: Multiple Choice increase total assets and retained earnings. decrease total assets and increase retained earnings. decrease total assets and net income increase total assets and decrease net income.
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