Question

At the beginning of the year, Mitchum Enterprises allows for estimated uncollectible accounts of 15,000. By the end of the year, write-offs of bad debts total17,000. What is the net amount of uncollectible accounts at the end of the year?

1) $2,000
2) $15,000
3) $17,000
4) $32,000

Answer 1

The net amount of uncollectible accounts at the end of the year is $32,000. Option D is answer.

Step-by-step explanation:

Here's how to calculate the net amount of uncollectible accounts:

Start with the beginning balance of the allowance for doubtful accounts. This is the amount that Mitchum Enterprises estimated they wouldn't be able to collect at the beginning of the year: $15,000.

Add the bad debt write-offs incurred during the year. These are the accounts that Mitchum Enterprises determined were actually uncollectible: $17,000.

Subtract any recoveries of bad debts made during the year. Since the question doesn't mention any recoveries, we assume this amount is 0.

Therefore, the net amount of uncollectible accounts at the end of the year is:

Net uncollectible accounts = Beginning balance + Write-offs - Recoveries

= $15,000 + $17,000 - $0

= $32,000

Option D is answer.