Question

Exercise 8-03 (Part Level Submission) At the beginning of the current period, Larkspur Corp. had balances in Accounts Receivable of $201,400 and in Allowance for Doubtful Accounts of $8,570 (credit). During the period, it had net credit sales of $840,400 and collections of $758,910. It wrote off as uncollectible accounts receivable of $8,026. However, a $2,889 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $23,180 at the end of the period. (Omit cost of goods sold entries.)

Answer 1

Requirement e

Ending Balance of Accounts Receivable	$      274,864.00
Ending Balance of in allowance for doubtful accounts	$         23,180.00

Working

Ending Balance of Accounts Receivable
Beginning balance	$      201,400.00
Net credit sales	$      840,400.00
Less: Cash collection	$    (758,910.00)
Subtotal	$      282,890.00
Less: Accounts written off	$         (8,026.00)
Ending Balance of Accounts Receivable	$      274,864.00

The estimated uncollectables amount will be the ending balance in allowance for doubtful accounts.

The accounts collected which are previously written off do not affect accounts receivable since debit of $2889 will be done first to reinstate and then credit to receivables will be made for 2889.