The following information pertains to Lightning, Inc. at the end of the year: $$\begin{array} { l r }
\text { Credit Sales } & \$ 60,000 \
\text { Accounts Payable } & 10,000 \
\text { Accounts Receivable } & 7,000 \
\text { Allowance for Uncollectible Accounts } & 400 \text { credit } \
\text { Cash Sales } & 20,000
\end{array}$$ Lightning uses the percentage-of-credit-sales method and estimates 1% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment?

Question

The following information pertains to Lightning, Inc. at the end of the year: $$\begin{array} { l r } 
\text { Credit Sales } & \$ 60,000 \
\text { Accounts Payable } & 10,000 \
\text { Accounts Receivable } & 7,000 \
\text { Allowance for Uncollectible Accounts } & 400 \text { credit } \
\text { Cash Sales } & 20,000
\end{array}$$ Lightning uses the percentage-of-credit-sales method and estimates 1% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment?

Quizplus · Accepted Answer

The Answer of The following information pertains to Lightning, Inc. at the end of the year: $$\begin{array} { l r } 
\text { Credit Sales } & \$ 60,000 \
\text { Accounts Payable } & 10,000 \
\text { Accounts Receivable } & 7,000 \
\text { Allowance for Uncollectible Accounts } & 400 \text { credit } \
\text { Cash Sales } & 20,000
\end{array}$$ Lightning uses the percentage-of-credit-sales method and estimates 1% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment?

The Following Information Pertains to Lightning, Inc Lightning Uses the Percentage-Of-Credit-Sales Method and Estimates 1% of Sales