The allowance for uncollectible accounts of a company has a balance, before year-end adjustments, of 24.200€. After a careful review of the collections process, management decided to write-off receivables for an amount of 33.100€. Account receivables has an ending debit balance of 432.000€. The estimate for non-collections that the company has been applying over the last years, has been 5%. What would be the amount which would reflect on the income statement the effect of all these adjustments taking place in the receivables account at year end? Select one: а. 30,500 b. 12,700 c. I dont know d. 21,600 е. 35,700

The allowance for uncollectible accounts of a company has a balance, before year-end adjustments, of 24.200€. After a careful review of the collections process, management decided to write-off receivables for an amount of 33.100€. Account receivables has an ending debit balance of 432.000€. The estimate for non-collections that the company has been applying over the last years, has been 5%. What would be the amount which would reflect on the income statement the effect of all these adjustments taking place in the receivables account at year end? Select one: а. 30,500 b. 12,700 c. I dont know d. 21,600 е. 35,700

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Before the year-end adjustment the Allowance for Doubtful Accounts has a debit balance of $5,000. Using the aging of receivables method, the desired balance of the Allowance for Doubtful Accounts is estimated as $35,000. a) What is the uncollectible accounts expense for the period? b) What is the journal entry required? c) What is the balance of the Allowance for Doubtful Accounts after adjustment? d) If the accounts receivable balance is $325,000, what is the net realizable value of the receivables after adjustment?
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