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On January 1,2016,Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $31,000 and $500,respectively.During the year Kincaid reported $72,500 of credit sales.Kincaid wrote off $550 of receivables as uncollectible in 2016.Cash collections of receivables amounted to $74,550.Kincaid estimates that it will be unable to collect one percent (1%)of credit sales.
-The amount of uncollectible accounts expense recognized in the 2016 income statement will be:
A)$310.
B)$725.
C)$745.50.
D)$550.

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Quizplus · Accepted Answer

The uncollectible accounts expense is estimated as 1% of credit sales, which is 1% of $72,500, resulting in $725.

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