Question

Urban Beat Real Estate reported the following information for 2020 E (Click the icon to view the information.) 1. If uncollectible accounts are determined by the percent of sales method to be 4 percent of not credit sales, what is the bad debt expense for 2020? 2. If uncollectible accounts are determined by the aging of receivables to be $3,500, what is the amount of net accounts receivable after adjusting entries for 2020? 1. If uncollectible accounts are determined by the percent-of-sales method to be 4 percent of net credit sales what is the bad debt expense for 2020? Bad debt expense for 2020 is 11050 Data Table X Х Accounts receivable Jan 1, 2020 Allowance for doubtful accounts, Dec 31, 2020, prior to adjustment Net credit sales during 2020 Collections on account during 2020 Cash sales during 2020 $ 28,000 1,200 245,000 95,000 35,000 Print Done Enter and
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Answer 1

1)As a percentage of net credit sales ,Bad debt expense =Net credit sales * % of sales

                                                                   = 245000 * 4%

                                                                  = $ 9800

2)Accounts receivable as on December 31,2020 (at year end )=Beginning receivable +net credit sales -collections from receivables

       = 28000 +245000 - 95000

       = 178000

Net accounts receivable = Accounts receivable as on December 31,2020 (at year end ) [Gross] -Allowance for doubtful account at year end

         = 178000 - 3500

         = $ 174500