Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit)respectively, at the beginning of 2014. During 2013, a customer defaults on a $12,000 balance related to goods purchased during 2011. By the end of the year, the company had made credit sales of $2,400,000 and collected $2,200,000 on account. It now estimates that 1 percent of its credit sales will default.

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The Answer of Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit)respectively, at the beginning of 2014. During 2013, a customer defaults on a $12,000 balance related to goods purchased during 2011. By the end of the year, the company had made credit sales of $2,400,000 and collected $2,200,000 on account. It now estimates that 1 percent of its credit sales will default.

Alpha Company's Accounts Receivable and Allowance for Doubtful Accounts Balances