On January 1, 2016, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $65,400 and $1,700, respectively. During the year Kincaid reported $162,000 of credit sales. Kincaid wrote off $1,350 of receivables as uncollectible in 2016. Cash collections of receivables amounted to $178,900. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.

The amount of uncollectible accounts expense recognized in the 2016 income statement will be:
Kincaid's entry to recognize the write-off of the uncollectible accounts will
Kincaid's entry required to recognize the uncollectible accounts expense for 2016 will
The net realizable value of receivables appearing on Kincaid's 2016 balance sheet will amount to:

1. Dr Allowance for bad debts     1350

          Cr Account receivable                  1350

     (Entry to write off un-collectible account in 2016)

2. Dr Bad debts expense   1620

       Cr Allowance for bad debts        1620

       9 Entry to record estimates of un-collectible)

Explanation:

a). Opening allowance for doubtful debts = 1700

Kincaid estimates 1% credit sales is collectibles = 162000 * 1% = 1620.

Total Allowance for doubtful debts =  1700+ 1620 = 3320

less: write off in 2016                                                   (1350)

         Allowance for doubtful debts at end                1970

Net realizable value:

Account receivable (end)=Account receivable (open)+ Sales during year -cash received against sales.

                      =65400+162000-178900

                     = 48500

Net realizable value = Account receivable (end)- Allowance for doubtful debt (end)

                         =  48500-1970

                       =  46530

answer; /// the above statement is (true); good luck

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