At the beginning of 2015, the balances for Accounts Receivable and Allowance for Doubtful Accounts were...
At the beginning of 2015, the balances for Accounts Receivable and Allowance for Doubtful Accounts were $77,000 and $5,144 (credit), respectively. During the current year, credit sales were $463,000 and collections on account were $341,000. In addition, $3,800 in uncollectible accounts were written off, and $750 of accounts previously written off were collected during the year. If management estimates bad debts based on 3 percent of total credit sales, determine the net realizable value of accounts receivable at December 31, 2015.
Homework Answers
Answer -
Computation of Net Realizable Value of Accounts Receivable at December 31, 2015
| Particulars | Explanation | Amount ($) | |
| a. | Accounts Receivable at the beginning of 2015 | Given in question | 77000 |
| b. | Credit Sales made during the current year | Given in question | 463000 |
| c. | Collections on account | Given in question | 341000 |
| d. | Allowance for Doubtful Accounts (Bad Debts Expense) | $463000 * 3% | 13890 |
| e. | Allowance for Doubtful Accounts at the beginning of 2015 | Given in question | 5144 |
| f. | Collection of accounts previously written off | Given in question | 750 |
| Net Realizable of Accounts Receivable at December 31, 2015 | a + b - c - d - e - f | 179216 | |
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At the beginning of 2015, the balances for Accounts Receivable
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