Solution-How much is the provision for uncollectible

How much is the provision for uncollectible accounts

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Question - BB Company began operations on January 1, 2019. On December 31, 2019, BB provided for uncollectible accounts based on 5% of annual credit sales. On January 1, 2020, BB changed its method of determining its allowance for uncollectible accounts to the percentage of accounts receivable. The rate of uncollectible accounts was determined to be 15% of the ending accounts receivable balance. In addition, BB wrote off all accounts receivable that were over 1 year old. The following additional information relates to the years ended December 31, 2019 and 2020.

	2020	2019
Credit sales	P8,000,000	P6,000,000
Collections (including collections on recovery)	6,950,000	4,500,000
Accounts written off	70,000	None
Recovery in accounts previously written off	20,000	None

Required - How much is the provision for uncollectible accounts for the year ended December 31, 2020?

Reference no: EM133148539

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How much is the provision for uncollectible accounts

Reference no: EM133148539

Reference no: EM133148539

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