As of January 1, 2021, Farley Co. had a credit balance of $523,000 in its allowance for uncollectible accounts. Based on experience, 3% of Farley's credit sales have been uncollectible. During 2021, Farley wrote off $636,000 of accounts receivable. Credit sales for 2021 were $19,400,000. In its December 31, 2021, balance sheet, what amount should Farley report as allowance for uncollectible accounts?

Question

Business

Raul Pham

4 January, 02:36

As of January 1, 2021, Farley Co. had a credit balance of $523,000 in its allowance for uncollectible accounts. Based on experience, 3% of Farley's credit sales have been uncollectible. During 2021, Farley wrote off $636,000 of accounts receivable. Credit sales for 2021 were $19,400,000. In its December 31, 2021, balance sheet, what amount should Farley report as allowance for uncollectible accounts?

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Answers (1)

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Hamza Powers · Answer 1

Balance sheet, what amount should Farley report as allowance for uncollectible accounts?

if we take the final balance of accounts receivable $582000

If the wrotte off difference affects the final balance and we do not register additional expenses. $469000

Explanation:

Credit balance allownace 523000

Allowance for uncollective 3%

Wrotte off 636000

Credit sales 19400000

Allowance for uncollective 3%

582000

Credit balance 523000

Wrotte off 636000

-113000

Allownace for uncollectible 469000