Temper Company has credit sales of $3.10 million for year 2013.Temper estimates that .9% of the credit sales will not be collected.On December 31,2013,the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $2,222.Temper prepares a schedule of its December 31,2013,accounts receivable by age.Based on past experience,it estimates the percent of receivables in each age category that will become uncollectible.This information is summarized here: Assuming the company uses the aging of Accounts Receivable method,what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry?
A)$25,246.40
B)$27,468.40
C)$23,024.40
D)$27,900.00
E)$24,420.40

Question

Temper Company has credit sales of $3.10 million for year 2013.Temper estimates that .9% of the credit sales will not be collected.On December 31,2013,the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $2,222.Temper prepares a schedule of its December 31,2013,accounts receivable by age.Based on past experience,it estimates the percent of receivables in each age category that will become uncollectible.This information is summarized here:  Assuming the company uses the aging of Accounts Receivable method,what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry?
A)$25,246.40 
B)$27,468.40 
C)$23,024.40 
D)$27,900.00 
E)$24,420.40

Quizplus · Accepted Answer

$620,000 x .0105 = $6,510.00 $248,000 x .0180 = $4,464.00 $ 49,600 x .0630 = $3,124.80 $ 24,800 x .3175 = $7,874.00 $ 4,960 x .6600 = $3,273.60 Total $25,246.40 desired ending balance $25,246.40 - $2,222 = $23,024.40 adjustment

Temper Company Has Credit Sales of $3