Oceanside Company uses the balance sheet approach in estimating uncollectible accounts expense. It has just completed an aging analysis of accounts receivable at December 31, 2009. This analysis disclosed the following information? What is the appropriate balance for Oceanside's Allowance for Doubtful Accounts at December 31, 2009
A) $95,000.
B) 2% of credit sales in 2009.
C) $1,560.
D) $2,160.

Question

Quizplus · Accepted Answer

The aging analysis shows that $1,560 of the accounts receivable are considered uncollectible. The allowance for doubtful accounts should be increased by this amount to $2,160 ($600 + $1,560).

Oceanside Company Uses the Balance Sheet Approach in Estimating Uncollectible