At the end of the prior year, Durney's Outdoor Outfitters reported the following information. Accounts Receivable, December 31, prior year Accounts Receivable (Gross) (A) $ 48,283 Allowance for Doubtful Accounts (XA) 8,474 Accounts Receivable (Net) (A) $ 39,809 During the current year, sales on account were $306,673, collections on account were $290,750, write-offs of bad debts were $7,059, and the bad debt expense adjustment was $4,775. Required: 1-a. Complete the Accounts Receivable and Allowance for Doubtful Accounts T-accounts to determine the balance sheet values. 1-b. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the income statement for the current year. 1-c. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the balance sheet for the current year.
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.
At the end of the prior year, Durney's Outdoor Outfitters reported the following information.
| Accounts Receivable (Gross) (A) | $ 48,283 |
|---|---|
| Allowance for Doubtful Accounts (XA) | 8,474 |
| Accounts Receivable (Net) (A) | $ 39,809 |
During the current year, sales on account were $306,673, collections on account were $290,750, write-offs of
Required:
1-a. Complete the Accounts Receivable and Allowance for Doubtful Accounts T-accounts to determine the
1-b. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the income statement for the current year.
1-c. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the balance sheet for the current year.
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