[The following information applies to the questions displayed below.]

On January 1, Year 2 Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account.

-What is the amount of uncollectible accounts expense recognized on the Year 2 income statement?
A)$320
B)$1,000
C)$2,080
D)$1,940

Question

[The following information applies to the questions displayed below.]

On January 1, Year 2 Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account.

-What is the amount of uncollectible accounts expense recognized on the Year 2 income statement?
A)$320
B)$1,000
C)$2,080
D)$1,940

Quizplus · Accepted Answer

Uncollectible accounts expense = Sales on account of $104,000 × 2% = $2,080

[The Following Information Applies to the Questions Displayed Below