Problem 2. The balance sheet of Acaciin Corporation as of December 31, 2015 shows gross Accounts Receivables of $32,000 and an Allowance for Uncollectible Accounts of $480. Sales revenues in 2016 were $175,200. The company wrote off $200 of accounts receivables as uncollectible during 2016 but recovered $120 in previously written off accounts during the period. The gross Accounts Receivable balance on December 31, 2016 was $13,200. The following is an analysis of the outstanding accounts receivable on that date. Days Outstanding 0 --60 61-120 Over 120 Amount $4,800 3,600 4,800 $13,200 Estimated % Uncollectible 1% 5% 10% Required i. Determine the amount of total amount of cash collected from customers including recoveries during 2016. ii. Determine Acaciin Co.'s bad debt expense for 2016. Use the aging of accounts receivable method. iii. Calculate the Acaciin Co.'s Accounts Receivable Turnover for 2015. Use the following formulae for calculating Accounts Receivable Turnover (A/R Turnover): A/R Turnover = Sales Revenue/Ave. Net Accounts Receivable
Problem 2. The balance sheet of Acaciin Corporation as of December 31, 2015 shows gross Accounts Receivables of $32,000 and an Allowance for Uncollectible Accounts of $480. Sales revenues in 2016 were $175,200. The company wrote off $200 of accounts receivables as uncollectible during 2016 but recovered $120 in previously written off accounts during the period. The gross Accounts Receivable balance on December 31, 2016 was $13,200. The following is an analysis of the outstanding accounts receivable on that date. Days Outstanding 0 --60 61-120 Over 120 Amount $4,800 3,600 4,800 $13,200 Estimated % Uncollectible 1% 5% 10% Required i. Determine the amount of total amount of cash collected from customers including recoveries during 2016. ii. Determine Acaciin Co.'s bad debt expense for 2016. Use the aging of accounts receivable method. iii. Calculate the Acaciin Co.'s Accounts Receivable Turnover for 2015. Use the following formulae for calculating Accounts Receivable Turnover (A/R Turnover): A/R Turnover = Sales Revenue/Ave. Net Accounts Receivable
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.
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Please let me know what the formulas/rules I need to know to solve this problem.
Transcribed Image Text:Problem 2. The balance sheet of Acaciin Corporation as of December 31, 2015 shows gross
Accounts Receivables of $32,000 and an Allowance for Uncollectible Accounts of $480.
Sales revenues in 2016 were $175,200. The company wrote off $200 of accounts receivables
as uncollectible during 2016 but recovered $120 in previously written off accounts during the
period. The gross Accounts Receivable balance on December 31, 2016 was $13,200. The
following is an analysis of the outstanding accounts receivable on that date.
Days Outstanding
0 --60
61-120
Over 120
Amount
$4,800
3,600
4,800
$13,200
Estimated %
Uncollectible
1%
5%
10%
Required
i. Determine the amount of total amount of cash collected from customers including recoveries
during 2016.
ii. Determine Acaciin Co.'s bad debt expense for 2016. Use the aging of accounts receivable method.
iii. Calculate the Acaciin Co.'s Accounts Receivable Turnover for 2015.
Use the following formulae for calculating Accounts Receivable Turnover (A/R Turnover):
A/R Turnover = Sales Revenue/Ave. Net Accounts Receivable
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