Crane Ltd. began operations in January 2023. On December 31, 2023, the end of its first year of operations, the balance in the company's Accounts Receivable account was $147,000. All of the company's sales are made on account, and during 2023, 80% of the total credit sales were collected, and no accounts were written off as uncollectible. Crane's management grouped its receivables based on credit risk characteristics, including geographic location and the length of time the receivables have been outstanding, and estimated the expected rate of credit losses for each group. Based on this, management estimated that the expected total credit losses would be $14,700. During the following year, 2024, Crane had sales totalling $889,000. It collected 75% of these sales, together with 95% of the outstanding receivables from 2023. During 2024, the company wrote off $19,300 of receivables from customers whose accounts were determined to be uncollectible. During the year, the company also recovered $2,900 from customers whose accounts had previously been written off. (Note that this amount was not included in the collection figures given above.) Management determined that the expected total credit losses would be $20,525. Show the accounts receivable section of the statement of financial position at December 31, 2024. Accounts Receivable, Net Crane Ltd. Statement of Financial Position (Partial) $ $
Crane Ltd. began operations in January 2023. On December 31, 2023, the end of its first year of operations, the balance in the company's Accounts Receivable account was $147,000. All of the company's sales are made on account, and during 2023, 80% of the total credit sales were collected, and no accounts were written off as uncollectible. Crane's management grouped its receivables based on credit risk characteristics, including geographic location and the length of time the receivables have been outstanding, and estimated the expected rate of credit losses for each group. Based on this, management estimated that the expected total credit losses would be $14,700. During the following year, 2024, Crane had sales totalling $889,000. It collected 75% of these sales, together with 95% of the outstanding receivables from 2023. During 2024, the company wrote off $19,300 of receivables from customers whose accounts were determined to be uncollectible. During the year, the company also recovered $2,900 from customers whose accounts had previously been written off. (Note that this amount was not included in the collection figures given above.) Management determined that the expected total credit losses would be $20,525. Show the accounts receivable section of the statement of financial position at December 31, 2024. Accounts Receivable, Net Crane Ltd. Statement of Financial Position (Partial) $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Ff.212.
Transcribed Image Text:Crane Ltd. began operations in January 2023. On December 31, 2023, the end of its first year of operations, the balance in the
company's Accounts Receivable account was $147,000. All of the company's sales are made on account, and during 2023, 80% of the
total credit sales were collected, and no accounts were written off as uncollectible. Crane's management grouped its receivables
based on credit risk characteristics, including geographic location and the length of time the receivables have been outstanding, and
estimated the expected rate of credit losses for each group. Based on this, management estimated that the expected total credit losses
would be $14,700. During the following year, 2024, Crane had sales totalling $889,000. It collected 75% of these sales, together with
95% of the outstanding receivables from 2023. During 2024, the company wrote off $19,300 of receivables from customers whose
accounts were determined to be uncollectible. During the year, the company also recovered $2,900 from customers whose accounts
had previously been written off. (Note that this amount was not included in the collection figures given above.) Management
determined that the expected total credit losses would be $20,525.
Show the accounts receivable section of the statement of financial position at December 31, 2024.
V:
Accounts Receivable, Net
Crane Ltd.
Statement of Financial Position (Partial)
V
$
$
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