In 2016 Yale Company had credit sales of $1050000 and granted sales discounts of $25000. On January 1 2016 Allowance for Doubtful Accounts had a credit balance of $26400. During 2016 $43000 of uncollectible accounts receivable were written off. Past experience indicates that 3% of net credit sales become uncollectible. What should be the adjusted balance of Allowance for Doubtful Accounts at December 31 2016?

Question

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The adjusted balance of Allowance for Doubtful Accounts at December 31, 2016, should be $14,150. This is calculated as follows:Beginning balance of Allowance for Doubtful Accounts: $26,400Add: Provision for doubtful accounts (3% of net credit sales): $31,500Less: Write-offs of uncollectible accounts receivable: $43,000Adjusted balance of Allowance for Doubtful Accounts: $14,150

In 2016 Yale Company Had Credit Sales of $1050000 and Granted