Smart Art is a new establishment.During the first year,there were credit sales of $40,000 and collections of credit sales of $36,000.One account for $650 was written off.The company decided to use the percent-of-sales method to account for bad debts expense,and decided to use a factor of 2% for its year-end adjustment of bad debts expense.
-What is the ending balance in Accounts Receivable at the end of the year?

Question

Quizplus · Accepted Answer

The ending balance in Accounts Receivable is calculated as follows: Start with the credit sales of $40,000, subtract the collections of $36,000, and subtract the account written off of $650. This results in an ending balance of $3,350.

Smart Art Is a New Establishment