statement. Credit sales $678,000 Bad debt expense as a percentage of sales 2% Write-off of accounts receivable $1,000 Tax rate 30% Estimated tax payment $31,000 Incorrect income statement, for the year ended December 31 Sales $678,000 Expenses 549,200 Bad debt expense 1,000 Pretax income 127,800 Tax expense 38,340 Net income 89,460 1) What is the allowance for doubtful accounts in 20X1?

Question

Business

Bambino

11 May, 10:24

statement. Credit sales $678,000 Bad debt expense as a percentage of sales 2% Write-off of accounts receivable $1,000 Tax rate 30% Estimated tax payment $31,000 Incorrect income statement, for the year ended December 31 Sales $678,000 Expenses 549,200 Bad debt expense 1,000 Pretax income 127,800 Tax expense 38,340 Net income 89,460 1) What is the allowance for doubtful accounts in 20X1?

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Lilyana · Answer 1

12,560 allowancwe for doubtful accounts

Explanation:

The company will recognize an allowance for 2% of the credit saleS:

678,000 x 2% = 13,560

Now, we write-off for 1,000 this decrease the allowance

Thhs, the balance will be for the difference

13,560 - 1,000 = 12,560