Domino Company ages its accounts receivable to estimate uncollectible accounts expense.Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $76,500 and $5,800,respectively.During Year 2,the company wrote off $4,640 in uncollectible accounts.In preparation for the company's estimate of uncollectible accounts expense for Year 2,Domino prepared the following aging schedule:

What amount will be reported as uncollectible accounts expense on the Year 2 income statement?

Question

Domino Company ages its accounts receivable to estimate uncollectible accounts expense.Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $76,500 and $5,800,respectively.During Year 2,the company wrote off $4,640 in uncollectible accounts.In preparation for the company's estimate of uncollectible accounts expense for Year 2,Domino prepared the following aging schedule:

What amount will be reported as uncollectible accounts expense on the Year 2 income statement?

Quizplus · Accepted Answer

Estimated ending allowance balance = ($104,000 × 1%) + ($45,000 × 5%) + ($9,920 × 10%) + ($4,440 × 25%) + ($3,800 × 50%) = $7,292
Ending allowance for doubtful accounts of $7,292 = Beginning allowance for doubtful accounts of $5,800 + Uncollectible accounts expense (the unknown) ? Write-offs of $4,640
Uncollectible accounts expense = $7,292 ? $5,800 + $4,640 = $6,132

Domino Company Ages Its Accounts Receivable to Estimate Uncollectible Accounts