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At the end of January,the unadjusted trial balance of Windsor,Inc.included the following accounts:

-Windsor uses the income statement approach in estimating uncollectible accounts expense,and uncollectible accounts expense is estimated to be 2% of credit sales.What is the amount of uncollectible accounts expense recognized in Windsor's income statement for January?
A)$8,000.
B)$10,000.
C)$9,200.
D)$7,200.

Question

[The following information applies to the questions displayed below.]
At the end of January,the unadjusted trial balance of Windsor,Inc.included the following accounts:
 
-Windsor uses the income statement approach in estimating uncollectible accounts expense,and uncollectible accounts expense is estimated to be 2% of credit sales.What is the amount of uncollectible accounts expense recognized in Windsor's income statement for January?
A)$8,000. 
B)$10,000. 
C)$9,200. 
D)$7,200.

Quizplus · Accepted Answer

The uncollectible accounts expense is calculated as 2% of credit sales. If the correct answer is $8,000, it means the credit sales for January must have been $400,000 ($8,000 is 2% of $400,000). This approach directly affects the income statement by recognizing the expense based on a percentage of credit sales.

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