Business, 02.04.2020 16:35, kelseybieberrr19

During Year 1, Ramona Department Store had total sales of $1,500,000, of which 80% were on credit. The beginning balance in Accounts Receivable (on January 1 of Year 1) was $82,500. The beginning balance in the Allowance for Bad Debts (on January 1 of Year 1) was $10,000. The amount of accounts written off as uncollectible during the year was $13,500.

The following aging of Accounts Receivable is for Ramona Company at the end of Year 1.

Aging of Accounts Receivable

December 31 of Year 1

col1 Total Less than 30 Days 31 Days to 60 Days 61 Days to 90 Days Over 90 Days

col2 $246,000 $183,000 $36,000 $12,000 $15,000

Ramona Company has developed the following bad debt information from its own past experience.

Age of Account

Percent Ultimately Uncollectible

Less than 30 days 2

31 to 60 days 12

61 to 90 days 35

Over 90 days 90

Ramona Company uses the aging method to determine its ending Allowance for Bad Debts balance. What is the appropriate Allowance for Bad Debts balance as of the end of Year 1?

a. $22,980
b. $25,680
c. $25,000
d. $28,500
e. $27,000
f. $13,500

Answers: 2

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During Year 1, Ramona Department Store had total sales of $1,500,000, of which 80% were on credit. T...