Answered

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For 2021, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an allowance for uncollectible accounts of $91,000 and $3,000, respectively, at December 31, 2020. During 2021, Rahal's credit sales and collections were $413,000 and $417,000, respectively, and $3,690 in accounts receivable were written off. Rahal's final balance in its allowance for uncollectible accounts at December 31, 2021, is:

Sagot :

ayokenny2001

Answer:

See below

Explanation:

Rahal's final balance in its allowance for uncollectible accounts at December 31, 2021 would be calculated as;

Step 1

= $413,000 × 1%

= $413,000 × 0.01

= $4,130

Step 2

= $3,000 - $3,690

= ($690)

Step 3

= $4,130 + ($690)

= $4,130 - $690

= $3,440

Therefore, Rahal's final balance in its allowance for uncollectible accounts at December 31, 2020 is $3,440

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