For 2018, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an allowance for uncollectible accounts of $86,500 and $2,100, respectively, at December 31, 2017. During 2018, Rahal's credit sales and collections were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written off.
- Rahal's final balance in its allowance for uncollectible accounts at December 31, 2018, is:

Question

Quizplus · Accepted Answer

$\begin{array}{lr}\text { Step } 1\
\text { Credit sales }&\$404,000\&\times 1.0\%\\text { Expense }&\$4,040
\end{array}$
 $\begin{array}{l}
\text { Step 2 } \
\text { Allowance } 12 / 31 / 2017 &\$2,100\
\text { Write-offs }&(2,340)\
\text { Allowance }&\$(240)\text { debit }
\end{array}$ Step 3 ($240) + $4,040 = $3,800

For 2018, Rahal's Auto Parts Estimates Bad Debt Expense at 1