Question

In its December 31, 2017 balance sheet, the Malik Hooker Enterprises (MHE) reported total accounts receivable of $100,000; the allowance for uncollectible accounts has a $10,000 credit balance. Credit sales during 2018 were $611,000, and collections from customers excluding recoveries totaled $591,000. During 2018, accounts receivable of $45,000 were written off, and $17,000 were recovered from accounts receivables previously written-off. MHE estimates that $15,000 of the accounts receivable at December 31, 2018, will be uncollectible. MHE uses the aging of accounts receivable method to estimate uncollectible accounts. In its December 31, 2018, balance sheet, what amount should MHE report as total (gross) accounts receivable? $58,000 $60,000 $75,000 o o $92,000

Answer 1

Correct answer-------------$75,000

Working

Accounts receivables , Beginning	$    100,000.00
Add: Credit sales	$    611,000.00
Less: Collections from receivables	$ (591,000.00)
Less: Accounts written off	$    (45,000.00)
Ending Balance of Receivable	$      75,000.00

Collection of receivable written off earlier will have no effect on total receivable that is why it is not included above.