Renue Spa had the following balances at December 31, Year 2: Cash of $12,000, Accounts Receivable of $89,000, Allowance for Doubtful Accounts of $2,300, and Retained Earnings of $98,700. During Year 3, the following events occurred: 1. $2,500 of accounts receivable were written off as uncollectible. 2. Renue unexpectedly collected $170 of receivables that had been written off in a previous accounting period. 3. Services provided on account during Year 3 were $212,000. 4. Cash collections from receivables were $213,945. 5. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required: 1. Organize the transaction data in accounts under an accounting equation. 2. 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. 3. What amount of uncollectible accounts expense will Renue Spa have for Year 3?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
Renue Spa had the following balances at December 31, Year 2: Cash of $12,000, Accounts Receivable of $89,000,
Allowance for Doubtful Accounts of $2,300, and Retained Earnings of $98,700. During Year 3, the following events
occurred:
1. $2,500 of accounts receivable were written off as uncollectible.
2. Renue unexpectedly collected $170 of receivables that had been written off in a previous accounting period.
3. Services provided on account during Year 3 were $212,000.
4. Cash collections from receivables were $213,945.
5. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period.
Required:
1. Organize the transaction data in accounts under an accounting equation.
2. 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.
3. What amount of uncollectible accounts expense will Renue Spa have for Year 3?
nt
Req A
Event
Organize the transaction data in accounts under an accounting equation.
Note: Enter any decreases to account balances with a minus sign. Not all cells require input.
Balance
1.
2a.
2b.
3.
4.
5.
Balance
Req B and C
Assets
Cash +
12,000+
Show Transcribed Text
+
+
+
+
+
+
12,000+
NRV
Accounts
Receivable
86,700 =
2,500 =
|=
=
J
=
||=
|-
89,200 =
RENUE SPA
Accounting Equation
Liabilities
0+
+
+
+
+
+
+
0+
Equity
Retained
Earnings
< Req A
98,700
(2,500)
96,200
Account Titles for Retained
Req B and C >
Transcribed Image Text:Renue Spa had the following balances at December 31, Year 2: Cash of $12,000, Accounts Receivable of $89,000, Allowance for Doubtful Accounts of $2,300, and Retained Earnings of $98,700. During Year 3, the following events occurred: 1. $2,500 of accounts receivable were written off as uncollectible. 2. Renue unexpectedly collected $170 of receivables that had been written off in a previous accounting period. 3. Services provided on account during Year 3 were $212,000. 4. Cash collections from receivables were $213,945. 5. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required: 1. Organize the transaction data in accounts under an accounting equation. 2. 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. 3. What amount of uncollectible accounts expense will Renue Spa have for Year 3? nt Req A Event Organize the transaction data in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. Not all cells require input. Balance 1. 2a. 2b. 3. 4. 5. Balance Req B and C Assets Cash + 12,000+ Show Transcribed Text + + + + + + 12,000+ NRV Accounts Receivable 86,700 = 2,500 = |= = J = ||= |- 89,200 = RENUE SPA Accounting Equation Liabilities 0+ + + + + + + 0+ Equity Retained Earnings < Req A 98,700 (2,500) 96,200 Account Titles for Retained Req B and C >
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 4 images

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education