Joey's Bike Shop sells new and used bicycle parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. During 2018, its first year of operations, Joey's Bike Shop experienced the following: Sales on account $271,400 Cash sales 623,900 257,830 1,355 Collectionss of accounts receivable Uncollectible accounts charged off during the year Required Assume that Joey's Bike Shop uses the allowance method of accounting for uncollectible accounts and estimates that 1 percent of its sales on account will not be collected. Answer the following questions: a. What is the Accounts Receivable balance at December 31, 2018? b. What is the ending balance of Allowance for Doubtful Accounts at December 31, 2018, after all entries and adjusting entries are posted? c. What is the amount of uncollectible accounts expense for 2018? d. What is the net realizable value of accounts receivable at December 31, 2018? Answer is complete but not entirely correct. $ 12,215 Accounts receivable |ь. а. Allowance for doubtful accounts Uncollectible accounts expense Net realizable value 5,421 $ 2,714 $ 93,315 с. 6е
Joey's Bike Shop sells new and used bicycle parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. During 2018, its first year of operations, Joey's Bike Shop experienced the following: Sales on account $271,400 Cash sales 623,900 257,830 1,355 Collectionss of accounts receivable Uncollectible accounts charged off during the year Required Assume that Joey's Bike Shop uses the allowance method of accounting for uncollectible accounts and estimates that 1 percent of its sales on account will not be collected. Answer the following questions: a. What is the Accounts Receivable balance at December 31, 2018? b. What is the ending balance of Allowance for Doubtful Accounts at December 31, 2018, after all entries and adjusting entries are posted? c. What is the amount of uncollectible accounts expense for 2018? d. What is the net realizable value of accounts receivable at December 31, 2018? Answer is complete but not entirely correct. $ 12,215 Accounts receivable |ь. а. Allowance for doubtful accounts Uncollectible accounts expense Net realizable value 5,421 $ 2,714 $ 93,315 с. 6е
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
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What is the ending balance of Allowance for Doubtful Accounts at December 31, 2018, after all entries and
Transcribed Image Text:Joey's Bike Shop sells new and used bicycle parts. Although a majority of its sales are cash sales, it makes a significant amount of
credit sales. During 2018, its first year of operations, Joey's Bike Shop experienced the following:
Sales on account
$271,400
Cash sales
623,900
257,830
1,355
Collectionss of accounts receivable
Uncollectible accounts charged off during the year
Required
Assume that Joey's Bike Shop uses the allowance method of accounting for uncollectible accounts and estimates that 1 percent of its
sales on account will not be collected. Answer the following questions:
a. What is the Accounts Receivable balance at December 31, 2018?
b. What is the ending balance of Allowance for Doubtful Accounts at December 31, 2018, after all entries and adjusting entries are
posted?
c. What is the amount of uncollectible accounts expense for 2018?
d. What is the net realizable value of accounts receivable at December 31, 2018?
Answer is complete but not entirely correct.
$ 12,215
Accounts receivable
|ь.
а.
Allowance for doubtful accounts
Uncollectible accounts expense
Net realizable value
5,421
$ 2,714
$ 93,315
с.
6е
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