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As of January 1,2021, Farley Co. had a credit balance of $520,000 in its allowance...

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Accounting

As of January 1,2021, Farley Co. had a credit balance of $520,000 in its allowance for
uncollectible accounts. Based on experience, 2% of Farley's credit sales have been
uncollectible. During 2021, Farley wrote off $650,000 of accounts receivable. Credit
sales for 2021 were $18,000,000. In its December 31,2021, balance sheet, what amount
should Farley report as allowance for uncollectible accounts?
A) $230,000.
B) $360,000.
(C) $590,000.
D) $880,000.
As of December 31,2021, Amy Jo's Appliances had unadjusted account balances in
accounts receivable of $311,000 and $970 in the allowance for uncollectible accounts,
following 2021 write-offs of $6,450 in bad debts. An analysis of Amy Jo's December 31,
2021, accounts receivable suggests that the allowance for uncollectible accounts should
be 2% of accounts receivable. Bad debt expense for 2021 should be:
A) $6,220.
B) $6,450
(C) $5,250.
D) None of these answer choices are correct.
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