Question & Answer: Calistoga Produce estimates bad debt expense at 0.50% of credit sales. The company reported accounts receivable and allowan…..

Calistoga Produce estimates bad debt expense at 0.50% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $476,000 and $1,570 respectively, at December 31, 2015. During 2016, Calistoga’s credit sales and collections were $323,000 and $307,000, respectively, and $1,730 in accounts receivable were written off.

Calistoga’s adjusted allowance for uncollectible accounts at December 31, 2016, is:

Expert Answer

 

solution:

allowance for uncollectible accounts at December 31, 2015 1,570
Add : provision for bad debts (323000*0.5%) 1,615
Less : account receivabl witten off -1,730
adjusted allowance for uncollectible accounts at December 31, 2016, 1,455
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