This company sells merchandise only on credit. For the year ended December 31, Year 1, the following data are available:
$\begin{array}{lr}
\text { Sales } & \$ 1,200,000 \
\text { Sales returns and allowances } & 50,000 \
\text { Accounts receivable — January 1, Year 1 } & 225,000 \
\text { Allowance for doubtful accounts —January 1, Year 1 } & 15,000 \
\text { Collections during Year 1 } & 1,050,000 \
\text { Accounts written off as uncollected during Year 1 } & 10,000
\end{array}$
-Refer to Aardvark Resale.Assume that the company estimates bad debts at 2% of net credit sales.
A) What amount will the company record as bad debts expense for Year 1?

Question

This company sells merchandise only on credit. For the year ended December 31, Year 1, the following data are available:
 $\begin{array}{lr}
\text { Sales } & \$ 1,200,000 \
\text { Sales returns and allowances } & 50,000 \
\text { Accounts receivable — January 1, Year 1 } & 225,000 \
\text { Allowance for doubtful accounts —January 1, Year 1 } & 15,000 \
\text { Collections during Year 1 } & 1,050,000 \
\text { Accounts written off as uncollected during Year 1 } & 10,000
\end{array}$
-Refer to Aardvark Resale.Assume that the company estimates bad debts at 2% of net credit sales.
 A) What amount will the company record as bad debts expense for Year 1?

Quizplus · Accepted Answer

The Answer of This company sells merchandise only on credit. For the year ended December 31, Year 1, the following data are available:
 $\begin{array}{lr}
\text { Sales } & \$ 1,200,000 \
\text { Sales returns and allowances } & 50,000 \
\text { Accounts receivable — January 1, Year 1 } & 225,000 \
\text { Allowance for doubtful accounts —January 1, Year 1 } & 15,000 \
\text { Collections during Year 1 } & 1,050,000 \
\text { Accounts written off as uncollected during Year 1 } & 10,000
\end{array}$
-Refer to Aardvark Resale.Assume that the company estimates bad debts at 2% of net credit sales.
 A) What amount will the company record as bad debts expense for Year 1?

This Company Sells Merchandise Only on Credit -Refer to Aardvark Resale