Question

John Den Bear Company had a $450,000 beginning balance in Accounts Receivable and a $18,000 credit balance in the Allowance for Doubtful Accounts. During the year, credit sales were $1,800,000 and customers' accounts collected were $1,770,000. Also, $12,000 in worthless accounts were written off. What was the net amount of receivables included in the current assets at the end of the year, before any provision was made for doubtful accounts

Answer 1

Answer:

The net amount of receivables included in the current assets at the end of the year is $462,000

Explanation:

Beginning Balance of Accounts Receivable = $450,000  

Add: Credit sales for the period = $1,800,000  

Less: Cash collected = $1,770,000

Less: Amounts Written Off = $12,000  

Ending Balance of Accounts Receivable = $468,000

 

Beginning Balance of Allowance Account = $18,000  

Less: Amounts Written off = $12,000  

Ending Balance = $6,000

Net amount receivable included in current assets  

Accounts receivable = $468,000  

Less: Allowance account = $6,000  

Net Receivables = $462,000