All of Serrano Company's sales are on credit basis. The following information is available for the current year: Allowance for doubtful accounts, Jan. 1 180,000 Sales 9,500,000 Sales returns and allowances 800,000 Sales discounts 200,000 Accounts written off as uncollectible 200,000 Serrano provides for doubtful accounts expense at the rate of 3% of net sales. What is the allowance for doubtful accounts at year-end?
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
16.
All of Serrano Company's sales are on credit basis. The following information is available for the current year:
| Allowance for doubtful accounts, Jan. 1 | 180,000 |
| Sales | 9,500,000 |
| Sales returns and allowances | 800,000 |
| Sales discounts | 200,000 |
| Accounts written off as uncollectible | 200,000 |
Serrano provides for doubtful accounts expense at the rate of 3% of net sales. What is the allowance for doubtful accounts at year-end?
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