On its recent financial statements, Hassell Fine Foods reported the following information about net sales revenue and accounts receivable (amounts in thousands): Accounts receivable, net of allowances of $313 and $277 Net sales revenue Current Year $15,189 64,420 Prior Year $12,938 55,122 According to its Form 10-K, Hassell recorded bad debt expense of $120 and there were no bad debt recoveries during the current year. Required: 1. Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current year? 2. Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Hassell's sales during the period were on open account.
On its recent financial statements, Hassell Fine Foods reported the following information about net sales revenue and accounts receivable (amounts in thousands): Accounts receivable, net of allowances of $313 and $277 Net sales revenue Current Year $15,189 64,420 Prior Year $12,938 55,122 According to its Form 10-K, Hassell recorded bad debt expense of $120 and there were no bad debt recoveries during the current year. Required: 1. Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current year? 2. Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year, assuming that all of Hassell's sales during the period were on open account.
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.
Question
Munabhai
Transcribed Image Text:On its recent financial statements, Hassell Fine Foods reported the following information about net sales revenue and accounts
receivable (amounts in thousands):
Accounts receivable, net of allowances of $313
and $277
Net sales revenue
Current
Year
$15,189
64,420
Prior
Year
$12,938
55,122
According to its Form 10-K, Hassell recorded bad debt expense of $120 and there were no bad debt recoveries during the current
year.
Required:
1. Using the following T-account for Allowance for Doubtful Accounts, what amount of bad debts was written off during the current
year?
2. Using the following T-account for Accounts Receivable (Gross), solve for cash collected from customers for the current year,
assuming that all of Hassell's sales during the period were on open account.
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