Problem 1: Turner Co. estimates its uncollectible accounts expense to be 2 percent of credit sales. Turner's credit sales for 2006 were $1,000,000. During 2006, Turner wrote off $18,000 of uncollectible accounts. Turner's Allowance for Uncollectible Accounts account had a $15,000 balance on January 1, 2006. On its December 31, 2006 income statement, what amount should Turner report as bad debt expense?
Problem 2: Post Company estimates bad debts at 3% of gross accounts receivable. The following information is from the balances of Post before adjustments:
Debit Credit
Accounts Receivable $2,600,000
Allowance for Uncollectible Accounts 20,800
Net Credit Sales $7,800,000
After adjustment at December 31, 2006, the Allowance for Uncollectible Accounts account should have a credit balance of?