On January 1, Year 2, Grande Company had a $69,600 balance in the Accounts Receivable account and a $2,600 balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $183,000 of service on account. The company collected $215,500 cash from accounts receivable. Uncollectible accounts are estimated to be 1% of sales on account. The amount of uncollectible accounts expense recognized on the Year 2 income statement is:

The amount of uncollectible accounts expense recognized on the Year 2 income statement is  $1,830.

Explanation:

On January 1, Year 2, Grande Company had balance = $69,600 in the Accounts Receivable account Grande provided services = $183,000The Allowance for Doubtful Accounts account = $2,600The company collected  cash from accounts receivable = $215,500 Uncollectible accounts are estimated to be =  1% of sales on account Thus, following calculation gives the desired result,Multiply amount of Grande services with 1% sales on account.i.e : $183,000 sales on account × 1% = $1,830So, the amount of uncollectible accounts expense is $1,830 as the income statement for the 2nd year.The reserves are recorded when, the uncollectible accounts expense are debited and credit the allowance for the uncollectible accounts.There are many reasons for the uncollectible accounts such as, the debtor's bankruptcy, the inability to get the debtor, fraud, etc

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