Question

Sheridan sells softball equipment. On November 14, they shipped $3080 worth of softball uniforms to Palos Middle School, terms 2/10, n/30. On November 21, they received an order from Tinley High School for $1610 worth of custom printed bats to be produced in December. On November 30, Palos Middle School returned $350 of defective merchandise. Sheridan has received no payments from either school as of month end. What amount will be recognized as net accounts receivable on the balance sheet as of November 30

Answer 1

Amount will be recognized as net accounts receivable on the balance sheet as of November 30-- $2730

Explanation:

First of all, the order received from Tinley High School has not been delivered  by the end of November ,hence the value of the order is irrelevant for the purpose of calculating net accounts receivable at the end of November.

However, out of the goods of $3080 sold to Palos Middle School,$350 worth has been returned as defective,leaving a balance of $2730       ($3080-$350).

For Palos to be entitled to the discount of 2% they should have made payment by 24th November,which never happened,as a result the accounts receivable stay at $2730.

What Is Net Receivables?

Net receivables are the total money owed to a company by its customers minus the money owed that will likely never be paid. Net receivables are often expressed as a percentage, and a higher percentage indicates a business has a greater ability to collect from its customers.

How do you calculate net accounts receivable?

You calculate net receivables by subtracting allowance for doubtful accounts from accounts receivable (A/R) on the balance sheet. The formula is A/R – allowance = net receivables.

Learn more about balance sheet :

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