Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $76,500 and $5,800, respectively. During the year, the company wrote off $4,640 in uncollectible accounts. In preparation for the company's Year 2 estimate, Domino prepared the following aging schedule: What will Domino record as Uncollectible Accounts Expense for Year 2?
A) $6,132
B) $1,512
C) $7,292
D) $4,640

Question

Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $76,500 and $5,800, respectively. During the year, the company wrote off $4,640 in uncollectible accounts. In preparation for the company's Year 2 estimate, Domino prepared the following aging schedule:  What will Domino record as Uncollectible Accounts Expense for Year 2?
A) $6,132 
B) $1,512 
C) $7,292 
D) $4,640

Quizplus · Accepted Answer

($104,000 × 1%) + ($45,000 × 5%) + ($9,920 × 10%) + ($4,440 × 25%) + ($3,800 × 50%) = $7,292 estimated ending allowance balance; $5,800 beginning allowance balance + uncollectible accounts expense - $4,640 write-offs = $7,292 ending allowance balance; uncollectible accounts expense = $7,292 - $5,800 + $4,640 = $6,132

Domino Company Uses the Aging of Accounts Receivable Method to Estimate