During the year, Zephyr Company made sales on credit (assume all sales were cred

Question

During the year, Zephyr Company made sales on credit (assume all sales were credit sales) and collected cash from customers (i.e., collected on Accounts Receivable). The following information was reported in the company's financial statements: From the income statement Sales (all were credit sales) $180,000 From the balance sheet Accounts Receivable 12.000 10,000 600 400 Beginning Ending Accounts Receivable Beginning Allowance for Doubtful Accounts Ending Allowance for Doubtful Accounts Note these financial statement amounts are AFTER all adjusting entries have been made - so all journal entries that SHOULD have been made to any relevant accounts HAVE ALREADY BEEN MADE and are reflected in the financial statements. During the year, Zephyr identfied $750 of Accounts Receivable that it deemed would never be collected, so they wrote-off those accounts. References

Explanation / Answer

18 Amount of cash collected = 12000+180000-10000-750= 181250 19 Bad debts expense = 750+(400-600)= 550

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