Question

Swathmore clothing corporation grants its customers 30 days' credit. the company uses the allowance method for its uncollectible accounts receivable. during the year, a monthly bad debt accrual is made by multiplying 2% times the amount of credit sales for the month. at the fiscal year-end of december 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly. at the end of 2017, accounts receivable were $596,000 and the allowance account had a credit balance of $60,000. accounts receivable activity for 2018 was as follows:

Answer 1

The accounts receivable = 596,000 + 60,000 (we add because allowance account had a Credit )

Accounts receivable at the end of 2018 = $656,000