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The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2016, the allowance account had a credit balance of $96,950. Credit sales for 2016 totaled $3,150,000 and the year-end accounts receivable balance was $537,500. During this year, $94,250 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal year ends on December 31. Required: 1. Does this situation describe a loss contingency?

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91964476

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