Mobile Technology Ltd. reported an unadjusted balance of accounts receivable of $1,290,000 at 31 December 20X3, along with a credit balance in the allowance for doubtful accounts of $83,200 and an allowance for sales discounts of $6,100. At year-end, the company determined that an allowance of $12,000 for sales discounts was needed. It also decided that $53,600 of accounts receivable were uncollectible and should be written off. Of the remaining receivables, it was determined that 45% were current, and of he remaining net current balance, an allowance for doubtful accounts of 2% of the net balance was needed. The remaining 55% of outstanding accounts receivable were past due and an allowance for doubtful accounts of 10% of the outstanding balance was needed. Required: cial position and calculato bad
Mobile Technology Ltd. reported an unadjusted balance of accounts receivable of $1,290,000 at 31 December 20X3, along with a credit balance in the allowance for doubtful accounts of $83,200 and an allowance for sales discounts of $6,100. At year-end, the company determined that an allowance of $12,000 for sales discounts was needed. It also decided that $53,600 of accounts receivable were uncollectible and should be written off. Of the remaining receivables, it was determined that 45% were current, and of he remaining net current balance, an allowance for doubtful accounts of 2% of the net balance was needed. The remaining 55% of outstanding accounts receivable were past due and an allowance for doubtful accounts of 10% of the outstanding balance was needed. Required: cial position and calculato bad
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.
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Transcribed Image Text:Information related to accounts receivable is given:
Mobile Technology Ltd. reported an unadjusted balance of accounts receivable of $1,290,000 at 31 December 20X3, along with a
credit balance in the allowance for doubtful accounts of $83,200 and an allowance for sales discounts of $6,100. At year-end, the
company determined that an allowance of $12,000 for sales discounts was needed. It also decided that $53,600 of accounts
receivable were uncollectible and should be written off. Of the remaining receivables, it was determined that 45% were current, and of
the remaining net current balance, an allowance for doubtful accounts of 2% of the net balance was needed. The remaining 55% of
outstanding accounts receivable were past due and an allowance for doubtful accounts of 10% of the outstanding balance was
needed.
Required:
For each case above, show how net accounts receivable would be reported on the statement of financial position, and calculate bad
debt expense for the year. (Round your answers to the nearest whole dollar.)
Net accounts receivable
Bad debt expense
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