Trade Receivable questions are confusing me. So in becker it would always ask what is the uncollectible allowance account etc and Im always wrong on the question. I get the number part but I'm not understanding whether its asking for the “plug” figure or the ending figure. Here are 2 different questions:
At the end of year one, Boller Co. had an ending balance in allowance for uncollectible accounts of
$30,000. During year two, Boller wrote-off $40,000 of accounts receivable. At the end of year two, Boller
had $300,000 in accounts receivable and determined that 8% of these would be uncollectible. What
amount should be reported as uncollectible accounts expense on Boller's year two income statement?
A: 34000
Question 2:
At January 1, 20X4, Jamin Co. had a credit balance of $260,000 in its allowance for uncollectible accounts. Based on past experience, 2% of Jamin's credit sales have been uncollectible. During 20X4, Jamin wrote off $325,000 of uncollectible accounts. Credit sales for 20X4 were $9,000,000. In its December 31, 20X4, balance sheet, what amount should Jamin report as allowance for uncollectible accounts?
A: 115000
So I get all the numbers but Q1 is asking for that “plug” figure while Q2 is asking for that ending figure.. not even sure if this is making sense but how do I determine what is what?
The biggest issue is the wording I think because both are using uncollectible allowance account.. Any help would be appreciated.. Doubt I will see too many of these on exam but its easy points and I feel stupid for not getting it.
BEC-
PASS (Expiring in DEC 2017)
REG- PASS (Expiring Feb 2018)
AUD- PASS (Expiring Oct 2018)
FAR- 65, 60, 59, 77!!! -GOD BLESS
If I can do it, anyone can do it!
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