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AT&U Company
Data for the Year Ended December 31, Year

question 115

Multiple Choice

AT&U Company
Data for the year ended December 31, Year 1, are presented below:
 Sales (credit) $2,500,000 Sales returns and allowances 50,000 Accounts receivable (December 31, Year 1)  640,000 Allowance for doubtful accounts (before adjustment at December 31, Year 1)  20,000Estimated amount of uncollected accounts based on aging analysis 45,000\begin{array}{llr} \text { Sales (credit) } &\$2,500,000\\ \text { Sales returns and allowances } &50,000\\ \text { Accounts receivable (December 31, Year 1) } &640,000\\ \text { Allowance for doubtful accounts} &\\ \text { (before adjustment at December 31, Year 1) } &20,000\\ \text {Estimated amount of uncollected accounts based on aging analysis } &45,000\\\end{array}

-Refer to the figure AT&U Company.If the company estimates its bad debts at 1% of net credit sales,what amount will be reported as bad debt expense for Year 1?


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