Question

. A company's allowance for doubtful accounts is $11,000 on 1/1/2018 and $16,000 on 1/1/2019. During 2018, bad debts expenses were estimated to be 3% on net credit sales of$250,000. During 2018, what was the amount of accounts receivable written off as uncollectible? (use T accounts and circle your answer) Accounts Receivable Allowance for D. A. Bad Debt Expense At 1/1/18 Nelson Corp. reported a balance in Accounts Receivable of $350,000 and a credit balance in the Allowance for Doubtful Accounts of $20,000. During 2018 Nelson Corp reported the following information: . Credit sales $475,000 .Cash sales of $10,000 2. 2% ofall credit sales historically are proven to be uncollectible . Wrote off accounts considered uncollectible of $1,400 . Collected $400,000 from customers (from-credit sales only) Recovered an additional $2,000 in accounts that had previously been written off (this amount is not included in the $400,000 collected above) What is the balance of the Accounts Receivable, Net at 12/31/182 (use T accounts to solve)

Answer 1

1)Amount written off as uncollectible = Beginning Allowance balance + Bad debt expense- ending allowance balance

         = 11000+ (250000*3%) - 16000

         =11000+ 7500-16000

         = 2500

Accounts receivable
		Account written off	2500

Allowance for doubtful account
Account written off	2500	Beg bal	11000
		Bad debt expense	7500
End bal	16000
		Beg bal as on 1/1/2019	16000

2)

Accounts receivable
Beg bal	350000	write off	1400
credit sales	475000	collections	400000
Previously written off	2000	collection from previously written off	2000
Ending balance	423600

Allowance for uncollectible account
write off	1400	Beg bal	20000
		Bad debt expense (475000*2%)	9500
	\	previously written off	2000
		Bal at end	30100

Net accounts receivable : 423600 - 30100 = 393500