A company started the year with accounts receivable of $15,000 and an allowance for uncollectible accounts of ($1,500). During this year, sales (on all account) were $110,000 and cash collections for sales amounted to $105,000. Also $1,000 worth of uncollectible accounts were specifically identified and written off. Then, at year end, the company estimated that 10% of ending accounts receivable would be uncollectible.
a) What amount will be shown on the year-end income for bad debts expense?
b) What is the balance in the allowance for uncollectible accounts after all adjustments have been made?