21You are given the following information relating to Exodus Trading:Gross profit rate based on cost25%Accounts receivable, December 31, 2021 P 120,000Allowance for bad debts, December 31, 20213,000Collections of accounts receivable in 2022645,000Cost of goods available for sale in 2022690,000Merchandise inventory, December 31, 2022150,000 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?

W.N.1: Calculation of Credit Sales in 2022: Cost of Sales = Cost of goods available for…

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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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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?

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