Jumpin Corporation uses the percentminusofminussales method to estimate uncollectibles. Net credit sales for the current year amount to $ 2 comma 100 comma 000, and management estimates 3% will be uncollectible. The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $ 1 comma 800. The amount of Expense reported on the income statement will be:

The amount of Uncollectible Account Expense reported on the income statement will be: $ 64,800

Explanation:

Jumpin Corporation

Percent of Sales method

Net credit sales  $ 2 100  000,

Un collectible estimated 3%

Un collectibles Accounts = 3% of  $ 2 100,000, = $ 63,000

Unadjusted Allowance for Un collectible Accounts  $ 1, 800 Dr.

Required Adjustment =                                 $ 64,800

The amount of Un collectible Account Expense reported on the income statement will be: $ 64,800

In the percent of sales method emphasis is laid on the matching principle in the income statement and amount of bad debts expense is subtracted from the accounts receivables.