Ch. 7 Assessment Help Save&Exits; 6 Calistoga Produce estimates bad debt uncolle
ID: 2555799 • Letter: C
Question
Ch. 7 Assessment Help Save&Exits; 6 Calistoga Produce estimates bad debt uncollectible accounts of $471000 and $1,650, respectively, at December 31, 2017 During 2018, Callstoga's credit sales and collections were 315,000 and $319,000, respectively, and $1720 in accounts recevable were written off expense at y1% of credit sales. The company reported accounts receivable ard all warce for Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2018, s 025829 eBook Multiple Choice $1,650 1,505 $1720 Prey6 of 10 Next Type here to searchExplanation / Answer
Bad debt Expense for 2018 = Credit Sales*1/2% = $315,000*0.50% = $1,575
Allowance balance before 2018 bad debt expense = Allowance for uncollectible at Dec 31, 2017 - Written off
= $1,650 - $1,720 = ($70) Debit
Allowance for uncollectible accounts at Dec 31, 2018 = $1,575- $70 = $1,505
Therefore the final balance in allowance for uncollectible accounts at December 31, 2018 is $1,505.
Hence the correct option is b) $1,505.