Jensen Corporation uses the percentage-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,010,000 and management estimates 3% will be uncollectible.The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $18,000.After all adjusting entries are made,the balance in Allowance for Uncollectible Accounts will be:
A)$18,000.
B)$18,540.
C)$42,300.
D)$60,300.

Question

Quizplus · Accepted Answer

($2,010,000 × 0.03)= $60,300
$60,300 - $18,000 = $42,300

Jensen Corporation Uses the Percentage-Of-Sales Method to Estimate Uncollectibles