A. What is the balance of Accounts Receivable at December 31, 2018? B. If the aging approach is used to estimate bad debts, what should the balance in Allowance for Doubtful Accounts be after the bad debts adjustment? C. If the aging approach is used to estimate bad debts, what amount should be recorded as bed debts expense for 2018?
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.
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Collections from credit customers during 2018 725,000
Estimated uncollectible accounts based on an aging analysis 13,200
Customer accounts written off as uncollectible during 2018 12,000
Allowance for doubtful accounts 1,700
(after write-off of uncollectible accounts)
Answer the following questions using the above data:
A. What is the balance of Accounts Receivable at December 31, 2018?
B. If the aging approach is used to estimate
be after the bad debts adjustment?
C. If the aging approach is used to estimate bad debts, what amount should be recorded as bed debts expense for
2018?
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