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McNamara Company uses the allowance method to account for uncollectible accounts and the perpetual inventory...

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Accounting

McNamara Company uses the allowance method to account for uncollectible accounts and the perpetual inventory system. McNamara had the following transactions relating to sales of inventory and the associated accounts receivable. The normal beginning balances (1/1/2025) for Accounts Receivable was $651,000 and for Allowance for Doubtful Accounts was $71,610.
1) Merchandise costing $5,827,500 was sold on account for $10,325,000.
2) The company collected $9,887,500 from customers on account.
3) $210,000 of accounts receivable were deemed uncollectible and written off.
4) At year-end, Lily Company estimates that 12% of its accounts receivable are uncollectible.

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