Question

Ace Co. prepared an aging of its accounts receivable at December 31, 2014 and determined that the net realizable value of the receivables was $600,000. Additional information is available as follows: Allowance for uncollectible accounts at 1/1/14—credit balance $ 68,000 Accounts written off as uncollectible during 2014 46,000 Accounts receivable at 12/31/14 650,000 Uncollectible accounts recovered during 2014 10,000 For the year ended December 31, 2014, Ace's uncollectible accounts expense would be

Answer 1

Answer:

uncollectible accounts expense 28,000

Explanation:

the aging of the accounts receivable is 600,000

AR unadjusted 650,000

We need to adjust by 50,000 to get the net realizable value

allowance:                      68,000

written off                      (46,000)

uncollectible expense             X

year end                         50,000

68,000-46,000 + uncollectible = 50,000

uncollectible = 50,000 -22,000 = 28,000