A business has the following balances at the beginning of the year: Accounts receivable: 235000 Allowance for doubtful accounts: -15250 The following summary transactions occurred during the year. Sales for the year, 100% on credit: 450000 Cash collected on accounts receivable for the year: 445200 Write-offs of uncollectable accounts receivable : 28200 Received a cheque from a customer whose account was previously written off: 2820 The overall rate used to estimate the allowance for doubtful accounts at year end: 8% Using the information above, answer the following questions.What is the balance in the accounts receivable account at year end? 1. What is the balance in the accounts receivable account at year end? 2. What is the balance in the allowance for doubtful accounts at year end? 3. What is the balance in the bad debt expense account at year end?
A business has the following balances at the beginning of the year: Accounts receivable: 235000 Allowance for doubtful accounts: -15250 The following summary transactions occurred during the year. Sales for the year, 100% on credit: 450000 Cash collected on accounts receivable for the year: 445200 Write-offs of uncollectable accounts receivable : 28200 Received a cheque from a customer whose account was previously written off: 2820 The overall rate used to estimate the allowance for doubtful accounts at year end: 8% Using the information above, answer the following questions.What is the balance in the accounts receivable account at year end? 1. What is the balance in the accounts receivable account at year end? 2. What is the balance in the allowance for doubtful accounts at year end? 3. What is the balance in the bad debt expense account at year end?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
A business has the following balances at the beginning of the year:
Allowance for doubtful accounts: -15250
The following summary transactions occurred during the year.
Sales for the year, 100% on credit: 450000
Cash collected on accounts receivable for the year: 445200
Write-offs of uncollectable accounts receivable : 28200
Received a cheque from a customer whose account was previously written off: 2820
The overall rate used to estimate the allowance for doubtful accounts at year end: 8%
Using the information above, answer the following questions.What is the balance in the accounts receivable account at year end?
The following summary transactions occurred during the year.
Sales for the year, 100% on credit: 450000
Cash collected on accounts receivable for the year: 445200
Write-offs of uncollectable accounts receivable : 28200
Received a cheque from a customer whose account was previously written off: 2820
The overall rate used to estimate the allowance for doubtful accounts at year end: 8%
Using the information above, answer the following questions.What is the balance in the accounts receivable account at year end?
1. What is the balance in the accounts receivable account at year end?
2. What is the balance in the allowance for doubtful accounts at year end?
3. What is the balance in the bad debt expense account at year end?
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