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Decks R Us has the following information reported on its 2013 comparative Balance Sheet:

	2012	2013
Nets Accounts Receivable (net allowance for bad debts of $128,740 in 2012 and $202,190 in 2013)	$638260	$882,810

Additional Information: During 2013, Decks R Us wrote-off $40,000 of accounts that had been specifically identified as uncollectible. Recovery of amounts previously written-off amounted to $12,000. Decks R Us makes sales on account and collected $3,700,000 from customers in 2013. Decks R Us uses the income statement method to estimate bad debt expense and, in both 2013 and 2014, estimates bad debts to be 2.5% of credit sales.

A. What is the amount of Decks R Us' 2013 credit sales?

B. If credit sales during 2014 were $5,000,000, what is the ending balance in the Allowance for Bad Debt account as of December 31, 2014 (after adjusting entries are recorded)?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9967784

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