Goole Party Planners had a $40,000 balance in AccountsReceivable and a $3,000 cr

Question

Goole Party Planners had a $40,000 balance in AccountsReceivable and a $3,000 credit balance in Allowance forUncollectible Accounts. During October, Google made credit sales of$100,000. October collections on account were $94,000, andwrite-offs of uncollectible receivables totaled $1,700.Uncollectible-account expense is estimated as 2% of revenue. 1. Record uncollectible-account expense for October by thedirect write-off method. 2. What amount of accounts receivable would Google PartyPlanners report on its October 31 balance sheet under the directwrite-off method? Does Google expect to collect the fullamount? Goole Party Planners had a $40,000 balance in AccountsReceivable and a $3,000 credit balance in Allowance forUncollectible Accounts. During October, Google made credit sales of$100,000. October collections on account were $94,000, andwrite-offs of uncollectible receivables totaled $1,700.Uncollectible-account expense is estimated as 2% of revenue. 1. Record uncollectible-account expense for October by thedirect write-off method. 2. What amount of accounts receivable would Google PartyPlanners report on its October 31 balance sheet under the directwrite-off method? Does Google expect to collect the fullamount?

Explanation / Answer

Uncollectible-accountExpense                                    $1,700    AccountsReceivables                                                            $1,700 Uncollectible receivables written off ___________________________________________________________________________________________ Accounts Receivables as on October 31 ============================== Opening Balance   ($40,000 -$3,000)                              $37,000 Add: Creditsales                                                           +$100,000 Less:Collections                                                              -$94,000 Less: Direct writtenoff                                                       -$1,700                                                                                     __________ Balance of Accounts Receivables to bereported        $41,300                                                                                     =========

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