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At the end of March,the unadjusted trial balance of Tutor,Inc.included the following accounts:

-Tutor uses the income statement approach in estimating uncollectible accounts expense,and uncollectible accounts expense is estimated to be 3% of credit sales.What is the amount of uncollectible accounts expense recognized in Tutor's income statement for March?
A)$13,500.
B)$18,000.
C)$8,600.
D)$7,200.

Question

[The following information applies to the questions displayed below.]
At the end of March,the unadjusted trial balance of Tutor,Inc.included the following accounts:
 
-Tutor uses the income statement approach in estimating uncollectible accounts expense,and uncollectible accounts expense is estimated to be 3% of credit sales.What is the amount of uncollectible accounts expense recognized in Tutor's income statement for March?
A)$13,500. 
B)$18,000. 
C)$8,600. 
D)$7,200.

Quizplus · Accepted Answer

Uncollectible accounts expense is estimated to be 3% of credit sales. Credit sales for March are $450,000. Therefore, uncollectible accounts expense is estimated to be $450,000 x 3% = $13,500.

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