Net Accounts Receivable: Aging of Receivables Method Video Lessons

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# Problem: The accounts receivable balance for Pentil Inc. at year-end is $100,000. Before calculating and recording this year's bad debt expense, the Allowance for Doubtful accounts has a credit balance of$500. Credit sales for the year are $1,500,000. Historically, 1% of credit sales have not been collected. An aging of accounts receivable has resulted in an estimate that$16,000 of the year-end accounts receivable balance is uncollectible. Using the aging of accounts receivable method, the adjusted balance in the allowance for doubtful accounts at year-end will be: a. $500 b.$16,500 c. $16,000 d.$15,000 e. $15,500 ###### FREE Expert Solution ###### Problem Details The accounts receivable balance for Pentil Inc. at year-end is$100,000. Before calculating and recording this year's bad debt expense, the Allowance for Doubtful accounts has a credit balance of $500. Credit sales for the year are$1,500,000. Historically, 1% of credit sales have not been collected. An aging of accounts receivable has resulted in an estimate that $16,000 of the year-end accounts receivable balance is uncollectible. Using the aging of accounts receivable method, the adjusted balance in the allowance for doubtful accounts at year-end will be: a.$500

b. $16,500 c.$16,000

d. $15,000 e.$15,500