Question

Novak Corp. Has accounts receivable of $90,300 at March 31, 2022. Credit terms are 2/10, n/30. At March 31, 2022, there is a $2,284 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of uncollectibles are as shown below.

Answer 1

Answer:

Allowance for doubtful accounts balance as at March 31st 2022 is $10,056.

Explanation:

Novak Corp. already have a balance of $2,284 in allowance for doubtful account.

The increase in allowance for doubtful account is calculated as follows.

$61,700 * 2% = $1,234

$12,600 * 5% = $630

$9,200 * 28% = $2,576

$6,800 * 49% = $3,332

Total = $7,772

$7,772 + $2,284 = $10,056