Net Accounts Receivable: Percentage of Sales Method Video Lessons

Video Thumbnail

Concept

Problem: The M Company earned $95,000 of revenue on account during the year. There was no beginning balance in the accounts receivable and allowance accounts. During the year, M collected $68,000 of cash from customers on account. The company estimates that it will be unable to collect 3% of its sales on account. The amount of uncollectible accounts expense recognized on the income statement was a. $2,040. b. $660. c. $2,850. d. $27,000.

FREE Expert Solution
Problem Details

The M Company earned $95,000 of revenue on account during the year. There was no beginning balance in the accounts receivable and allowance accounts. During the year, M collected $68,000 of cash from customers on account. The company estimates that it will be unable to collect 3% of its sales on account. The amount of uncollectible accounts expense recognized on the income statement was

a. $2,040.

b. $660.

c. $2,850.

d. $27,000.

Frequently Asked Questions

What scientific concept do you need to know in order to solve this problem?

Our tutors have indicated that to solve this problem you will need to apply the Net Accounts Receivable: Percentage of Sales Method concept. You can view video lessons to learn Net Accounts Receivable: Percentage of Sales Method. Or if you need more Net Accounts Receivable: Percentage of Sales Method practice, you can also practice Net Accounts Receivable: Percentage of Sales Method practice problems.

What is the difficulty of this problem?

Our tutors rated the difficulty ofThe M Company earned $95,000 of revenue on account during th...as low difficulty.