Allegheny Company ended Year 1 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $23,000 and $900,respectively.During Year 2,Allegheny wrote off $1,500 of Uncollectible Accounts.Using the percent of receivables method,Allegheny estimates that the ending Allowance for Doubtful Accounts balance should be $1,600.What amount will Allegheny report as Uncollectible Accounts Expense on its Year 2 income statement?
A)$2,200
B)$1,500
C)$700
D)$1,600

Question

Quizplus · Accepted Answer

Ending allowance for doubtful accounts of $1,600 = Beginning allowance for doubtful accounts of $900 + Uncollectible accounts expense (the unknown)- Write-offs of $1,500
Uncollectible accounts expense = $1,600 - $900 + $1,500 = $2,200

Allegheny Company Ended Year 1 with Balances in Accounts Receivable