The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,900. Total retained earnings at the end of Year 1 was $85,100. During Year 2, $1,900 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $170 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $213,000, and cash collections from receivables were $214,954. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information 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 2. 2. (2) Balance of Accounts Receivable at December 31, Year 2. 3. (3) Net realizable value of Accounts Receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2? Complete this question by entering your answers in the tabs below. Req A Req B and C Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.) RENUE SPA Horizontal Statements Model Assets Event Cash NRV Accounts Liabilities Receivable Bal. 0 85,100 1. 2a. + 2b. Equity Accounts Titles for Retained Retained Earnings Earnings 0 85,100 = + + + 213,000 Revenue 01+ (2,130) ° (2,130) Uncollectible accounts expense 80,846 0 295,970 Bal. 3. 4. 5. ° + (170) 213,000 (214,954)
The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,900. Total retained earnings at the end of Year 1 was $85,100. During Year 2, $1,900 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $170 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $213,000, and cash collections from receivables were $214,954. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information 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 2. 2. (2) Balance of Accounts Receivable at December 31, Year 2. 3. (3) Net realizable value of Accounts Receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2? Complete this question by entering your answers in the tabs below. Req A Req B and C Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.) RENUE SPA Horizontal Statements Model Assets Event Cash NRV Accounts Liabilities Receivable Bal. 0 85,100 1. 2a. + 2b. Equity Accounts Titles for Retained Retained Earnings Earnings 0 85,100 = + + + 213,000 Revenue 01+ (2,130) ° (2,130) Uncollectible accounts expense 80,846 0 295,970 Bal. 3. 4. 5. ° + (170) 213,000 (214,954)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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
Transcribed Image Text:The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance
for Doubtful Accounts was $2,900. Total retained earnings at the end of Year 1 was $85,100. During Year 2, $1,900 of accounts
receivable were written off as uncollectible. In addition, Renue unexpectedly collected $170 of receivables that had been written off in
a previous accounting period. Services provided on account during Year 2 were $213,000, and cash collections from receivables were
$214,954. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period.
Required
a. Organize the information 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 2.
2. (2) Balance of Accounts Receivable at December 31, Year 2.
3. (3) Net realizable value of Accounts Receivable at December 31, Year 2.
c. What amount of uncollectible accounts expense will Renue Spa record for Year 2?
Complete this question by entering your answers in the tabs below.
Req A
Req B and C
Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus
sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)
RENUE SPA
Horizontal Statements Model
Assets
Event
Cash
NRV
Accounts
Receivable
Liabilities
Bal.
0+
85,100
Equity
Retained
Earnings
Accounts Titles for Retained
Earnings
0+
85,100
1.
+
2a.
+
=
+
2b.
+
(170)
+
3.
+
213,000
+
213,000 Revenue
Bal.
4.
5.
(214,954)
01+
(2,130)
0+
(2,130) Uncollectible accounts expense
0
80,846-
0+
295,970
Req A
Req B and C >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education