At January 1, 2014, Famous Thirty Three Company reported accounts receivable of

Question

At January 1, 2014, Famous Thirty Three Company reported accounts receivable of $100,000 and the allowance for doubtful accounts had a $15,000 credit balance. Famous Thirty Thirty company records bad debt expense using the net credit sales method and estimates that 5% of its credit sales each year will prove to be uncollectible. Famous Thirty Three Company reported the following information for 2014 and 2015: At December 31, 2015, Famous Thirty Three Company's net realizable value of accounts receivable totaled $67,200. Calculate Famous Thirty Three Company's accounts receivable balance at December 31, 2014. Do not use decimals in your answer.

Explanation / Answer

   Allowance for bad debts

   To Accounts receivable( wriiten off) 9400 By Balance b/d $15000

To Balance c/d 29900    By bad Debt(balancing figure) $24300

  39300   39300

Bad debt expense = 5% * credit sale

credit sale = bad debt / 0.05

= 24300 / 0.05

= $486000

   Accounts Receivable

To Balance b/d 100000 By cash 370000

To credit sale 486000 By Allowance for doubt full debt 9400

By Balance c/d(balancing figure) 206600

586000 586000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.