The September 30, 2020 balance sheet of ABC Corporation disclosed the following information relating to its receivables: Accounts Receivable-General (net of $18,000 allowance) $342,000 ABC prepares quarterly financial statements. The following occurred during the fourth quarter of 2020: 1. During the 4th quarter, ABC had credit sales of $2,600,000 and collections on accounts receivable (general) of $2,300,000. Uncollectible accounts totaling $19,000 were written off, and a $2,600 accounts receivable previously written off was collected (not included in the $2,300,000 of cash collections reported above.) 2. On November 1, ABC assigned $300,000 of accounts receivable to Quicken Finance on a non- notification basis. Quicken advanced ABC cash proceeds for 85% of the accounts assigned, less a finance fee of $5,000, in exchange for an interest-bearing note. The note incurs interest at 1% per month on the outstanding loan balance. Cash collections from these assigned accounts are to be remitted monthly to Quicken Finance and include accrued interest (i.e. the cash collected each month must be used to repay both principal and interest on the note.) • During November, ABC collected $150,000 on assigned accounts. ABC also accepted sales returns of $2,000. The November collections were remitted to Quicken on November 30th and included accrued interest for the month. • During December, ABC wrote off $3,000 of assigned accounts as uncollectible. By December 31st, assigned accounts of $80,000 were collected in cash. These cash collections were remitted to Quicken Finance on December 31, 2020, and included accrued interest for December. Required: Use the above information to answer the next (7) questions: a. Determine the ending balance of Accounts Receivable - General as of December 31, 2020:
The September 30, 2020 balance sheet of ABC Corporation disclosed the following information relating to its receivables: Accounts Receivable-General (net of $18,000 allowance) $342,000 ABC prepares quarterly financial statements. The following occurred during the fourth quarter of 2020: 1. During the 4th quarter, ABC had credit sales of $2,600,000 and collections on accounts receivable (general) of $2,300,000. Uncollectible accounts totaling $19,000 were written off, and a $2,600 accounts receivable previously written off was collected (not included in the $2,300,000 of cash collections reported above.) 2. On November 1, ABC assigned $300,000 of accounts receivable to Quicken Finance on a non- notification basis. Quicken advanced ABC cash proceeds for 85% of the accounts assigned, less a finance fee of $5,000, in exchange for an interest-bearing note. The note incurs interest at 1% per month on the outstanding loan balance. Cash collections from these assigned accounts are to be remitted monthly to Quicken Finance and include accrued interest (i.e. the cash collected each month must be used to repay both principal and interest on the note.) • During November, ABC collected $150,000 on assigned accounts. ABC also accepted sales returns of $2,000. The November collections were remitted to Quicken on November 30th and included accrued interest for the month. • During December, ABC wrote off $3,000 of assigned accounts as uncollectible. By December 31st, assigned accounts of $80,000 were collected in cash. These cash collections were remitted to Quicken Finance on December 31, 2020, and included accrued interest for December. Required: Use the above information to answer the next (7) questions: a. Determine the ending balance of Accounts Receivable - General as of December 31, 2020:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
Transcribed Image Text:Do both questions with
proper explanation.
The September 30, 2020 balance sheet of ABC Corporation disclosed the following information
relating to its receivables:
Accounts Receivable-General (net of $18,000 allowance)
$342,000
ABC prepares quarterly financial statements. The following occurred during the fourth quarter of
2020:
1. During the 4th quarter, ABC had credit sales of $2,600,000 and collections on accounts
receivable (general) of $2,300,000. Uncollectible accounts totaling $19,000 were written off, and a
$2,600 accounts receivable previously written off was collected (not included in the $2,300,000 of
cash collections reported above.)
2. On November 1, ABC assigned $300,000 of accounts receivable to Quicken Finance on a non-
notification basis. Quicken advanced ABC cash proceeds for 85% of the accounts assigned, less a
finance fee of $5,000, in exchange for an interest-bearing note. The note incurs interest at 1% per
month on the outstanding loan balance. Cash collections from these assigned accounts are to be
remitted monthly to Quicken Finance and include accrued interest (i.e. the cash collected each
month must be used to repay both principal and interest on the note.)
• During November, ABC collected $150,000 on assigned accounts. ABC also accepted sales
returns of $2,000. The November collections were remitted to Quicken on November 30th and
included accrued interest for the month.
• During December, ABC wrote off $3,000 of assigned accounts as uncollectible. By December
31st, assigned accounts of $80,000 were collected in cash. These cash collections were
remitted to Quicken Finance on December 31, 2020, and included accrued interest for
December.
Required: Use the above information to answer the next (7) questions:
a. Determine the ending balance of Accounts Receivable - General as of December 31, 2020:
O $377,000
O $323,000
O $341,000
O $360,000
Determine the ending balance of the Accounts Receivable - Assigned as of December 31, 2020:
O $70,000
O $67,000
O $65,000
O $60,000
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