Question

On its recent financial statements, Hassell Fine Foods reported the following information about net sales revenue and accounts receivable (amounts in thousands):
Current Year Prior Year
Accounts receivable, net of allowances of $213 and $177 $14,189 $11,938
Net sales revenue 61,920 52,622

Requied:
a. What amount of bad debts was written off during the current year?
b. Based on your answer to requirement (1), solve for cash collected from customers for the current year, assuming that all of Hassell's sales during the period were on open account.

Answer 1

Answer:

   The answer are given below;        

Explanation:

 Allowance for doubtful accounts-opening            ($177,000)

Allowance for doubtful accounts-closing               $213,000

Allowance for Bad Debts for the year                          36,000

b. Cash Collected from customers;

   Account Receivable-opening           $11,938

   Sales revenue for the year              $61,920

   Account Receivable-Closing            ($14,189)

   Cash Collected  from Customers     $59,669