The following information relates to Rem Corp\'s accounts receivable for 2015: A
ID: 2417711 • Letter: T
Question
The following information relates to Rem Corp's accounts receivable for 2015:
Accounts receivable, 1/1/15 $ 500,000
Credit sales for 2015 2,000,000
Sales returns for 2015 60,000
Accounts written off during 2015 37,000
Collections from customers during 2015 1,500,000
Estimated future sales returns at 12/31/15 35,000
Estimated uncollectible accounts at 12/31/15 73,000
Required:
What amount should Rem report for accounts receivable before sales returns and uncollectible accounts, at December 31, 2015?
NOTE: Be sure to show all your calculations. This has the possibility of partial credit. Incorrect answers without calculations will automatically result in zero points.
Explanation / Answer
Amount reported by Rem for accounts receivable before sales returns and uncollectible accounts, at December 31, 2015 is calculated as under:
Accounts receivable is the amount which is receivable from customers within 1 year time.
Estimated Uncollective accounts and sales return at dec 31, 2015 is not taken into consideration.
Particulars Amount ($) Amount ($) Accounts Receivable as on 01/01/15 $500,000 Add: Credit Sales for 2015 2,000,000 Less: Sale return for 2015 60,000 Net Credit Sales for 2015 1,940,000 Less: Collections from Customers during 2015 1,500,000 Net accounts receivable 940,000 Less: Bad debt expense 37,000 Accounts Receivable as on 31/12/15 903,000Related Questions
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