Accounts receivable and uncollectible accounts) The following information relates to Bedford Company’s accounts receivable: Accounts receivable balance on December 31, 2023 $ 900,000 Allowance for expected credit losses balance on December 31, 2023 55,000 Credit sales made in 2024 5,800,000 Collections from customers on account in 2024 4,900,000 Accounts receivable written off in 2024 70,000 Accounts previously written off that were recovered in 2024 (not included in the collections above) 6,000 After grouping its receivables by geographic region, the credit risk characteristic identified as being best for determining credit losses, and estimating the expected rate of credit losses for each group, the company estimates that the total expected credit losses at December 31, 2024, will be $80,000. The allowance account is to be adjusted accordingly. Required Calculate the ending balance in Accounts Receivable, as at December 31, 2024. Calculate the Allowance for Expected Credit Losses balance, before adjustment, as at December 31, 2024. Calculate the credit losses for the year 2024. Please donot provide solution in image format provide solution in step by step and fast solution
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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Accounts receivable balance on December 31, 2023 $ 900,000
Allowance for expected credit losses balance on December 31, 2023 55,000
Credit sales made in 2024 5,800,000
Collections from customers on account in 2024 4,900,000
Accounts receivable written off in 2024 70,000
Accounts previously written off that were recovered in 2024
(not included in the collections above) 6,000
After grouping its receivables by geographic region, the credit risk characteristic identified as being best for determining credit losses, and estimating the expected rate of credit losses for each group, the company estimates that the total expected credit losses at December 31, 2024, will be $80,000. The allowance account is to be adjusted accordingly.
Required
Calculate the ending balance in Accounts Receivable, as at December 31, 2024.
Calculate the Allowance for Expected Credit Losses balance, before adjustment, as at December 31, 2024.
Calculate the credit losses for the year 2024.
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