Question

A portion of the current assets section of the December 31, 2020, balance sheet for Carr Co. is presented here: Accounts receivable Less: Allowance for bad debts $54,800 (6,400) $47,600 The company's accounting records revealed the following information for the year ended December 31, 2020 Sales (all on account) Cash collections from customers Accounts written off Bad debts expense (accrued at 12/31/20) 412,000 426,000 13,500 12,100 Required: Using the information provided for 2020, calculate the net realizable value of accounts receivable at December 31, 2019. and prepare the appropriate balance sheet presentation for Carr Co., as of that point in time. (Hint Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts. Remember that you are solving for the beginning balance of each account) Nort

Answer 1

Answer:

At December 31,2019:
Accounts receivable	$81,500
Less: Allowance for bad debts	($7,800)
Accounts receivable (net)	$73,700

Calculations:

Accounts receivable
Beg. Bal.	$81,500
Sales	$412,000	Cash	$426,000
		Written off	$13,500
		End. Bal.	$54,000
Total	$493,500	Total	$493,500
Allowance for bad debts
		Beg. Bal.	$7,800
Written off	$13,500	Bad debt expense	$12,100
End. Bal.	$6,400
Total	$19,900	Total	$19,900