On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $66,200 and $1,900, respectively. During Year 2, Kincaid reported $166,000 of credit sales, wrote off $1,400 of receivables as uncollectible, and collected cash from receivables amounting to $185,700. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales. Which of the following describes the effects of Kincaid's entry to recognize the write-off of the uncollectible accounts?

Question

Business

Casey Gallegos

15 November, 10:04

On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $66,200 and $1,900, respectively. During Year 2, Kincaid reported $166,000 of credit sales, wrote off $1,400 of receivables as uncollectible, and collected cash from receivables amounting to $185,700. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales. Which of the following describes the effects of Kincaid's entry to recognize the write-off of the uncollectible accounts?

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Patience Massey · Answer 1

Which of the following describes the effects of Kincaid's entry to recognize the write-off of the uncollectible accounts?

Dr Allowance for Uncollectible Accounts $ 1.400

Cr Accounts Receivable $ 1.400

Explanation:

January 1 Year 2

Dr Accounts Receivable $ 66,200

Cr Allowance for Doubtful Accounts $ 1,900

Kincaid reported $166,000 of credit sales

Dr Accounts Receivable $ 166,000

Cr SALES $ 166,000

Wrote off $1,400 of receivables as uncollectible

Dr Allowance for Uncollectible Accounts $ 1,400

Cr Accounts Receivable $ 1,400

Collected cash from receivables amounting to $185,700

Dr Cash $ 185,700

Cr Accounts Receivable $ 185,700

Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.

Dr Bad Debt Expense $ 1,160

Cr Allowance for Uncollectible Accounts $ 1,160