*beginning balance A portion of the current assets section of the December 31, 2
ID: 2331913 • Letter: #
Question
*beginning balance
A portion of the current assets section of the December 31, 2017, balance sheet for Carr Co, is presented here $ 100.000 Less Allowance for bad debts (14000) $ 86,000 The company's accounting records revealed the following information for the year ended December 31, 2017 Sales (all on account) Cash collections from customers Accounts written off Bad debts expense (accrued at 12/31/17) 5800,000 820,000 30,000 24,000 Using the information provided for 2017, calculate the net realizable value of accounts receivable at December 31, 2016, and prepare the appropriate balance sheet presentation for Can 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 accour 31, 2016 Less Allowance for bad debts Accounts receivable (Net)Explanation / Answer
Answer:
At December 31, 2016
Accounts receivable
150,000
Less: Allowance for bad debts
(20,000)
Accounts receivable (Net)
130,000
Working notes for the above answer is as under
1
Net realizable value = Accounts receivable – Allowance for bad debts .
we need to work backwards for finding balances in these accounts at December 31, 2016 that is begging balance (beginning balances)
December 31, 2016 balance
= $820,000 + $30,000 – $800,000 + $100,000
= $150,000
This makes sense because the credits to accounts receivable during the year for cash collections and writeoffs exceeded the debit for sales on account
Or you can understand by following tabular format prasentation
Account receivable
12/31/16 balance
150,000
Cash collection
820,000
Sales on account
800,000
Account written off
30,000
Balance c/f
100,000
950,000
950,000
12/31/17 balance b/f
100,000
2
Alloance for bad debt
=14,000+30,000-24000
=20,000
At December 31, 2016
Accounts receivable
150,000
Less: Allowance for bad debts
(20,000)
Accounts receivable (Net)
130,000
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