Chapter 7, Problem 7.5P

(1)

To determine

Accounts receivable:

Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.

Bad debt expense:

Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.

To compute: The amount of accounts receivable due from customers at the end of 2015 and 2014.

(2)

To determine

To compute: The amount of Accounts Receivable Written-off during 2015.

(3)

To determine

To compute: The amount of Gross Sales.

(4)

To determine

The amount of cash collected from customers during the year, assuming that all sales are made on a credit basis.