At the End of the Year, a Company Has the Following

question 153

Essay

At the end of the year, a company has the following accounts receivable and estimates of uncollectible accounts: 1. Accounts not yet due $= \$ 80,000$ ; estimated uncollectible $= 2 \%$ .
2. Accounts $1 - 30$ days past due $= \$ 20,000$ ; estimated uncollectible $= 25 \%$ .
3. Accounts more than 30 days past due $= \$ 4,000$ ; estimated uncollectible $= 60 \%$ . Record the year-end adjustment for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible Accounts is $900 (credit).

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Definitions:

Married Filing Jointly

A tax filing status for married couples that allows them to file one tax return jointly, combining their incomes and deductions.

Single Taxpayer

A filing status for unmarried individuals that allows them to report their income and deductions on their federal tax return.

Wages

Compensation received by employees for services performed, usually based on hours worked or amount of work done.

Personal Exemption

A specific amount that taxpayers could deduct from their taxable income for themselves and their dependents, applicable in tax years before 2018.