A company reports net accounts receivable of $152,000 on it’s December 31, 2019

Question

A company reports net accounts receivable of $152,000 on it’s December 31, 2019 balance sheet. The allowance for bad debts has a credit balance of $15,000. What is the balance of accounts receivable?

a)$137,000

b)$167,000

c)$152,000

d) $157,000

The following information is from the records of  Chicago Photography:

Accounts receivable, December 31, 2019                                          $23,000 (debit)

Allowance for Bad Debts, December 31, 2019 prior to adjustment         700 (debit)

Net credit sales for 2019                                                                       94,000

Accounts written off as uncollectible during 2019                                    500

Bad Debts expense is estimated by the aging- of- receivables method. Management estimates that $2,950 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivables after the adjustment for bad debts.

a)$18,850

b)$20,750

c)$19,350

d)$20,050

A company issues a 120- a day, 14% note for $15,000. What is the principal amount of the note? (round answer to nearest,,,,

a)$15,700

b)$14,300

c)$15,000

d) $17,100

specialty foods, inc. maintains a separate accounts receivable account for each customer . regarding this accounting treatment, which of the following statements is incorrect?

A)The separate customer accounts receivable are called subsidiary accounts

b)When a customer makes a payment on account, a debit is posted to the accounts receivable subsidiary account as well as to the accounts receivable control account

c)The sum of all balances in the subsidiary accounts receivable equals a control account balance

d)The purpose of this accounting treatment is to account for payments received from the customer and the amounts still owed.

Explanation / Answer

Answers

Net Accounts receivables = $152,000
(+) Allowance for bad debts = $15,000

Balance of accounts receivables = $167,000 [152000 + 15000]

After adjustments, Allowance for Bad debts will be equal to amount of estimated uncollectibles = $2,950

Accounts receivables Dec 31, 2019 = $23,000
(-) Allowances for bad debt new balance = $2,950
Net accounts receivables = 23000 – 2950 = $20,050

In the given case, $15,000 is principal;
15000 x 14% x 120/360 = $700 is Interest

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