Jawhawks Company estimates bad debt expense to be 3% of credit sales. On December 31, 2015, the company reported accounts receivable and an allowance for doubtful accounts of $86,500 and $2,100, respectively. During 2016, the company’s credit sales and collections were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written off. Determine the company’s Net Realizable Value of Accounts Receivable on December 31, 2016. answer: 68,280 how do you get to this answer I keep getting 68,040
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.
-
Jawhawks Company estimates
bad debt expense to be 3% of credit sales. On December 31, 2015, the company reportedaccounts receivable and an allowance for doubtful accounts of $86,500 and $2,100, respectively. During 2016, the company’s credit sales and collections were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written off.Determine the company’s Net Realizable Value of Accounts Receivable on December 31, 2016.
answer: 68,280 how do you get to this answer I keep getting 68,040
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
