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Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $12k in the allowance for doubtful accounts. If the companh estimates that 6% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expenses recognized for the year? a.) 390k b.) 378k c.) 402k d.) 1,440,000

Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $12k in the allowance for doubtful accounts. If the companh estimates that 6% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expenses recognized for the year? a.) 390k b.) 378k c.) 402k d.) 1,440,000

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 7RE: McKinney Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made...
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Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $12k in the allowance for doubtful accounts. If the companh estimates that 6% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expenses recognized for the year?

a.) 390k

b.) 378k

c.) 402k

d.) 1,440,000

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