The General Ledger Account for Accounts Receivable Shows a Debit

question 48

Essay

The general ledger account for Accounts Receivable shows a debit balance of $40,000.The Allowance for Uncollectible Accounts has a credit balance of $2,000.Net sales for the year were $250,000.In the past,3 percent of net sales have proved uncollectible.An aging of accounts receivable accounts results in an estimate of $9,000 of uncollectible accounts receivable.Calculate (1)Uncollectible Accounts Expense and (2)the ending balance of the Allowance for Uncollectible Accounts using (a)the percentage of net sales method and (b)the accounts receivable aging method for both (1)and (2).

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Definitions:

Customizing Services

Modifying or tailoring services to meet the specific needs or preferences of individual customers.

Variable Nature of Services

Describes the characteristics of services that make them less consistent and more difficult to standardize compared to physical products.

Intangible

Refers to something that cannot be physically touched or measured but holds value, such as intellectual property, brand reputation, or goodwill.

Pure Product

A good that is not altered or combined with any other goods, offered in its simplest form in the market.