At the beginning of period, Ammar Co. had balances in account receivable of $ 400,000 and allowance for doubtful accounts of $ 12,000 (credit). During the period, it had net credit sales of $ 1,200.000 and collections of $ 1,050,000. It wrote as uncollectible accounts receivable of $ 9,500. However, a $4,500 account previously written off as uncollectible was recovered at the end of period. Uncollectible accounts are estimated to total $35,000 at the end of period. A:Prepare the entry to record bad debt expense for the period? B: Determine the ending balances in account receivable and allowance for doubtful accounts? C:Determine the net realizable?
At the beginning of period, Ammar Co. had balances in account receivable of $ 400,000 and allowance for doubtful accounts of $ 12,000 (credit). During the period, it had net credit sales of $ 1,200.000 and collections of $ 1,050,000. It wrote as uncollectible accounts receivable of $ 9,500. However, a $4,500 account previously written off as uncollectible was recovered at the end of period. Uncollectible accounts are estimated to total $35,000 at the end of period. A:Prepare the entry to record bad debt expense for the period? B: Determine the ending balances in account receivable and allowance for doubtful accounts? C:Determine the net realizable?
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
At the beginning of period, Ammar Co. had balances in account receivable of $ 400,000 and
allowance for doubtful accounts of $ 12,000 (credit). During the period, it had net credit sales of $
1,200.000 and collections of $ 1,050,000. It wrote as uncollectible accounts receivable of $ 9,500.
However, a $4,500 account previously written off as uncollectible was recovered at the end of
period. Uncollectible accounts are estimated to total $35,000 at the end of period.
A:Prepare the entry to record bad debt expense for the period?
B: Determine the ending balances in account receivable and allowance for doubtful accounts?
C:Determine the net realizable?
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