On January 1, 2025, Marin Corporation started the year with a balance in Accounts Receivable of $145,000 and a credit balance in Allowance for Doubtful Accounts of $8,100. During 2025, the company had total sales of $660,000; 75% of these sales were credit sales. Collections (not including the cash sales) during the period were $525,000. Marin wrote off as uncollectible accounts receivable of $8,800. In addition, an account of $720 that was previously written off an uncollectible was recovered during the year. Uncollectible accounts are estimated to be 5% of the end-of-year Accounts Receivable balance. (Omit cost of goods sold entries.)
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.
What is the net realizable value of the receivables at December 31, 2025? Cash (net) realizable value of receivables
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