Problem
Macedonia Corporation provides the following information for the year ended December 31, 2014:
Sales revenue for the year $500,000
Accounts receivable, balance, December 31 75,000
Allowance for doubtful accounts, unadjusted balance, December 31 1,500 credit
Provide the following information:
If it is estimated that 2% of all sales will be uncollectible, what is bad debt expense for the year?
Using the above approach, what is the adjusted, December 31 balance for allowance for doubtful accounts?
If it is estimated that 15% of December 31 accounts receivable will be uncollectible, what is bad debt expense for the year?
Using the above approach, what is the adjusted, December 31 balance for allowance for doubtful accounts?