You are given the following information relating to Exodus Trading: Gross profit rate based on cost 25% Accounts receivable, December 31, 2021 P 120,000 Allowance for bad debts, December 31, 2021 3,000 Collections of accounts receivable in 2022 645,000 Cost of goods available for sale in 2022 690,000 Merchandise inventory, December 31, 2022 150,000 Assuming all sales were on account, what was the company’s accounts receivable balance at December 31, 2022? How much is the bad debts expense in 2022 if the allowance for bad debts was estimated to be 5% of the outstanding accounts receivable as of Dec. 31, 2022?
You are given the following information relating to Exodus Trading: Gross profit rate based on cost 25% Accounts receivable, December 31, 2021 P 120,000 Allowance for bad debts, December 31, 2021 3,000 Collections of accounts receivable in 2022 645,000 Cost of goods available for sale in 2022 690,000 Merchandise inventory, December 31, 2022 150,000 Assuming all sales were on account, what was the company’s accounts receivable balance at December 31, 2022? How much is the bad debts expense in 2022 if the allowance for bad debts was estimated to be 5% of the outstanding accounts receivable as of Dec. 31, 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You are given the following information relating to Exodus Trading:
Gross profit rate based on cost 25%
Allowance for
Collections of accounts receivable in 2022 645,000
Cost of goods available for sale in 2022 690,000
Merchandise inventory, December 31, 2022 150,000
Assuming all sales were on account, what was the company’s accounts receivable balance at December 31, 2022? How much is the bad debts expense in 2022 if the allowance for bad debts was estimated to be 5% of the outstanding accounts receivable as of Dec. 31, 2022?
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