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    The Effects of Transactions on the Bad Debts Allowance

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    Calistoga Produce estimates bad debt expense at ½% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650 respectively, at December 31, 2008. During 2009, Calistoga's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in accounts receivable were written off.

    9. (1) Calistoga's adjusted allowance for uncollectible accounts at December 31, 2009, is:

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    Solution Summary

    This solution demonstrates the effects of various transactions on the Allowance for Doubtful Accounts.