Renue Spa had the following balances at December 31, Year 1: Cash of $15,000, Accounts Receivable of $61,000, Allowance for Doubtful Accounts of $3,750, and Retained Earnings of $72,250. During Year 3, $2,100 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $500 of receivables that had been written off in a previous accounting period. Services provided on account during Year 3 were $215,000, and cash collections from receivables were $218,000. Uncollectible accounts expense was estimated to be 2 percent of the sales on account for the period. Required a. Organize the transaction data in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. (1) Balance of Allowance for Doubtful Accounts at December 31, Year 3. 2. (2) Balance of Accounts Receivable at December 31, Year 3. 3. (3) Net realizable value of Accounts Receivable at December 31, Year 3.
Renue Spa had the following balances at December 31, Year 1: Cash of $15,000, Accounts Receivable of $61,000, Allowance for Doubtful Accounts of $3,750, and Retained Earnings of $72,250. During Year 3, $2,100 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $500 of receivables that had been written off in a previous accounting period. Services provided on account during Year 3 were $215,000, and cash collections from receivables were $218,000. Uncollectible accounts expense was estimated to be 2 percent of the sales on account for the period. Required a. Organize the transaction data in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. (1) Balance of Allowance for Doubtful Accounts at December 31, Year 3. 2. (2) Balance of Accounts Receivable at December 31, Year 3. 3. (3) Net realizable value of Accounts Receivable at December 31, Year 3.
Chapter6: Business Expenses
Section: Chapter Questions
Problem 44P
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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.
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Transcribed Image Text:Renue Spa had the following balances at December 31, Year 1: Cash of $15,000, Accounts Receivable of $61,000, Allowance for
Doubtful Accounts of $3,750, and Retained Earnings of $72,250. During Year 3, $2,100 of accounts receivable were written off as
uncollectible. In addition, Renue unexpectedly collected $500 of receivables that had been written off in a previous accounting period.
Services provided on account during Year 3 were $215,000, and cash collections from receivables were $218,000. Uncollectible
accounts expense was estimated to be 2 percent of the sales on account for the period.
ts
Required
a. Organize the transaction data in accounts under an accounting equation.
b. Based on the preceding information, compute (after year-end adjustment):
=Book
1. (1) Balance of Allowance for Doubtful Accounts at December 31, Year 3.
2. (2) Balance of Accounts Receivable at December 31, Year 3.
3. (3) Net realizable value of Accounts Receivable at December 31, Year 3.
Print
c. What amount of uncollectible accounts expense will Renue Spa have for Year 3?
erences
Complete this question by entering your answers in the tabs below.
Reg A
Reg B and C
Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Not all c
"Accounts Titles for Rotained
ell coluron
require an innut - leave cells blank if there is no corresponding Retained Earnings input ne
Transcribed Image Text:Reg A
Reg B and C
10
Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Not all cells in the
"Accounts Titles for Retained Earnings" column may require an input - leave cells blank if there is no corresponding Retained Earnings input needed.)
points
RENUE SPA
Horizontal Statements Model
eBook
Assets
Equity
Retained Accounts Titles for Retained Earnings
Earnings
Event
Accounts
= Liabilities
Cash
4.
Allowance
Receivable
Print
+
Bal.
+
1.
2a.
References
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2b.
3.
4.
5.
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Bal.
Reg B and C
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