At January 1,2019, Towing Company reported an allowance for bad debts with a $4,300 credit balance....

Question

Question

At January 1,2019, Towing Company reported an allowance for bad debts with a $4,300 credit balance....

At January 1,2019, Towing Company reported an allowance for bad debts with a $4,300
credit balance. At December 31, 2019, Towing Company prepared the following aging
schedule:

                     Accounts Receivable      % Uncollectible
not past due            $135,000                     3%
1-30 days past due        42,000                     7%
31-60 days past due       28,000                    11%
61-90 days past due       15,000                    16%
over 90 days past due      4,000                    54%

Based on the above information, Towing Company reported bad debt expense of $11,600
for 2019. 

Calculate the net realizable value of Towing's accounts receivable at December 31, 2019.

business accounting

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Answer 1

Answer #1

Solution:

Accounts Receivable % Uncollectible Uncollectible amount $135,000 3% 4,050 42,000 7% 2,940 28,000 11% 3,080 15,000 16% 2,400

Thus, Net realizable value of Towing's accounts rec. = Total Accounts Rec. - Balance in 'Allowance for bad debts' account

= $224,000 - 14,630

= $209,370

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Answer 2

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At January 1,2019, Towing Company reported an allowance for bad debts with a $4,300 credit balance....

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