Tangier Company had a January 1, 2022, balance in Allowance for Doubtful Accounts of $7,000 Cr. The following events required journal entries during 2022: Apr. 15 Diya’s account receivable of $5,700 was deemed uncollectible. July 1 Nitosa paid the full amount of her previously written-off account receivable. The receivable of $2,300 had been written off in 2021. Dec. 31 Bad debts expense was estimated to be 2.0 percent of net credit sales, which had amounted to $375,000. What amount of Allowance for Doubtful Accounts should appear in the December 31, 2022 balance sheet? a. $6,500 b. $11,100 c. $22,500 d. $17,900 e. None of the above.
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.
18. Tangier Company had a January 1, 2022, balance in Allowance for Doubtful Accounts of $7,000 Cr. The following events required
Apr. 15 Diya’s account receivable of $5,700 was deemed uncollectible.
July 1 Nitosa paid the full amount of her previously written-off account receivable. The receivable of $2,300 had been written off in 2021.
Dec. 31
What amount of Allowance for Doubtful Accounts should appear in the December 31, 2022
a. $6,500
b. $11,100
c. $22,500
d. $17,900
e. None of the above.
19. Nguyen Company had $250,000 of
a. $242,500
b. $240,500
c. $244,500
d. $248,000
e. None of the above.
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