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Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31,
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2015 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $45,000 $507,000 During 2016, credit sales were $1,825,000, cash collections from customers $1,905,000, and $54,000 in accounts receivable were written off. In addition, $4,500 was collected from a customer whose account was written off in 2015. An aging of accounts receivable at December 31, 2016, reveals the following: Percentage of Year-End Percent Age Group Receivables in Group Uncollectible 0-60 days 70% 5% 61-90 days 20 15 91-120 days 20 Over 120 days 40
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