[nammu12]

16. Joyner Distributing is estimating its allowance for uncollectible accounts at January 31, 2002, based on the following information:

Accounts Receivable, January 1 $1,375,000
Total Accounts Receivable write-offs during January $200,000
Allowance for Uncollectible Accounts, January 1 $175,000
Total sales for January $10,000,000

Sixty percent of Joyner’s total sales for January 2002 are credit sales. Based on past experience, Joyner estimates that 5% of its credit sales will be uncollectible. What is uncollectible accounts expense for January 2002?
a. $125,000
b. $175,000
c. $200,000
d. $300,000
e. $358,750

Please let me know the answer

[ScottGem]

Please let us know what YOU think is the answer and we will try to confirm. The assignment was given for you to try so you can learn. Please don't ask or expect us to do the work for you.

[nammu12]

I did try. According to my calcualtions I got an answer $300,000.

Total sales are $10,000,000. 60% are credit sales. Means 10,000,000 x 60/100= 6,000,000

5 % are uncollectable that means 6000000 x 5/100= 300,000

Please confirm the answer. I think the way I am doing is correct. Please repsond.

[CaptainForest]

I agree with you.

$300,000 seems correct.