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Problem 5-24 Determining account balances: percent of revenue allowance method of a
Determining account balances: percent of revenue allowance method
of accounting for uncollectible accounts The following information pertains to Leslie’s Floor Store sales on account and accounts receivable. Accounts receivable balance, January 1, 2012 $ 52,500 Allowance for doubtful accounts, January 1, 2012 4,725 Sales on account, 2012 925,000 Cost of goods sold, 2012 615,000 Collections of accounts receivable, 2012 835,000 After several collection attempts, Leslie’s wrote off $3,100 of accounts that could not be collected. Leslie’s estimates that bad debts expense will be 0.5 percent of sales on account. Required a. Compute the following amounts. (1) Using the allowance method, the amount of uncollectible accounts expense for 2012. (2) Net realizable value of receivables at the end of 2012. b. Explain why the uncollectible accounts |
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