Allegheny Company ended Year 1 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $23,000 and $900, respectively. During Year 2, Allegheny wrote off $1,500 of Uncollectible Accounts. After aging its receivables, Allegheny estimates that the ending Allowance for Doubtful Accounts balance should be $1,600. What will Allegheny report as Uncollectible Accounts Expense on its Year 2 income statement?
A) $2,200
B) $1,500
C) $700
D) $1,600

Question

Quizplus · Accepted Answer

$900 beginning allowance balance - $1,500 write-offs + uncollectible accounts expense = $1,600 ending allowance balance; uncollectible accounts expense = $1,600 - $900 + $1,500 = $2,200

Allegheny Company Ended Year 1 with Balances in Accounts Receivable