Accounts receivable, net of allowances of $411 and $380 $ 29,224 $ 26,381 Net sales revenue 66,169 64,597 According to its Form 10-K, Macrosoft recorded bad debt expense of $122 and there were no bad debt recoveries during the current year. Required: Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current year? Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Macrosoft’s sales during the period were on open account.
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.
| Current Year | Prior Year |
|
|---|---|---|
| $ 29,224 | $ 26,381 | |
| Net sales revenue | 66,169 | 64,597 |
According to its Form 10-K, Macrosoft recorded bad debt expense of $122 and there were no bad debt recoveries during the current year.
Required:
- Using the following T-account for Allowance for Doubtful Accounts, what amount of
bad debts was written off during the current year? - Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Macrosoft’s sales during the period were on open account.
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