Flyer estimates bad debt expense assuming that 2% of credit sales have historica
ID: 2515979 • Letter: F
Question
Flyer estimates bad debt expense assuming that 2% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?
$10,500
$7,400
$9,100
$10,800
Flyer Company has provided the following information prior to any year-end bad debt adjustment: • Cash sales, $155,000 • Credit sales, $455,000 • Selling and administrative expenses, $115,000 • Sales returns and allowances, $35,000 • Gross profit, $495,000 • Accounts receivable, $155,000 • Sales discounts, $19,000 • Allowance for doubtful accounts credit balance, $1,700Flyer estimates bad debt expense assuming that 2% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?
$10,500
$7,400
$9,100
$10,800
Explanation / Answer
1 Credit Sales 455000*2% bad debts expense equals 9100 credit balance 1700 balance in the allowance for doubtful accounts 10800 Ans D 10800