Question
Winner Corporation had credit sales of $30 million in the current year. At the end of the year, $20 million remained to be collected from
Winner Corporation had credit sales of $30 million in the current year. At the end of the year, $20 million remained to be collected from customers. The company uses the percentage-of-credit-sales method to estimate future bad debts. The allowance account has a $2 million credit balance at the end of the current year. The company expects 10 percent of credit sales to be uncollectible. What would be the net accounts receivable after the year-end adjustment?
your answer: $17 million
correct answer: $15 million.
As you can see, I know what the correct answer is (because the text gives it) but I have no clue how they got that answer. Can someone show the steps?
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