At January 1, 1993, the credit balance in the Allowance for Doubtful Accounts of Kap Shin Co. was $400,000. For 1993, the provision for doubtful accounts is based on a percentage of net sales. Net sales for 1993 were $70,000,000. On the basis of the latest available facts, the 1993 provision for doubtful accounts is estimated to be 0.8% of net sales. During 1993, uncollectible receivables amounting to $490,000 were written off against the allowance for doubtful accounts.
Prepare a schedule computing the balance in Shin's Allowance for Doubtful Accounts at 12-31-1993 (see attachment).
The solution is in excel file attached.
Allowance for Doubtful ...
The solution presents a schedule of the computation of the balance in the allowance account as of 12-31-1993.