On 1 January 2017, a company had $240,640 balance in (gross) accounts receivable

Question

On 1 January 2017, a company had $240,640 balance in (gross) accounts receivable and $14,800 balance in the allowance for doubtful accounts. During the year the company reported sales of $486,600, 60% of which were on account. The company was able to collect $173,000 of accounts receivables during 2017. The accounts receivable balance on 31 December 2017 was $329,600. The firm's management determined that as of 31 December 2017 $17,236 of their balance in accounts receivables would not be collectible in the future.

How much was the write off in accounts receivables during 2017?

a) $23,800

b) 22,600

c) $25,600

d) $29,640

e) 26,490

Explanation / Answer

Calculation of write off in accounts receivable:

Given opening balance = 240640

add : Sales on account 486000*60/100=291600

Less : cash received =(173000)

Less : closing balance = (329600)

Therefore difference is the balncing figure = $29640

This balncing figure is the amount to be written off.

So, answer is OPTION C.

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