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On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $31,000 and $500, respectively. During Year 2, Kincaid reported $72,500 of credit sales, wrote off $550 of receivables as uncollectible, and collected cash from receivables amounting to $74,550. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.

-What is the amount of uncollectible accounts expense that will be reported on the Year 2 income statement?
A)$310
B)$725
C)$745.50
D)$550

Question

[The following information applies to the questions displayed below.]

On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $31,000 and $500, respectively. During Year 2, Kincaid reported $72,500 of credit sales, wrote off $550 of receivables as uncollectible, and collected cash from receivables amounting to $74,550. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.

-What is the amount of uncollectible accounts expense that will be reported on the Year 2 income statement?
A)$310
B)$725
C)$745.50
D)$550

Quizplus · Accepted Answer

Uncollectible accounts expense = Credit sales of $72,500 credit sales × 1% = $725

[The Following Information Applies to the Questions Displayed Below