Question

At the beginning of the year, accounts receivable were $45,000 and the allowance for bad debts was $4,200. During the year, sales (all on account) were $180,000, cash collections were $165,000, bad debts expense totaled $3,100, and $2,600 of accounts receivable were written off as bad debts. The balance at the end of the year for the Allowance for Bad Debts account was:

Answer 1

Answer:

Ending balance in accounts receivable = $57,400.00

Explanation:

given data

accounts receivable = $45,000

bad debts = $4,200

sales = $180,000

to find out

balance at the end of the year for the Allowance for Bad Debts

solution

we know here at Beginning accounts receivable balance is = $45,000.00

and  Accounts written off = $2,600.00

so Subtotal is $45000 - $2600  = $42,400

and

so Ending balance in accounts receivable is

Ending balance in accounts receivable = subtotal + Credit Sales - Collection from receivable    

put here value

Ending balance in accounts receivable = $42,400 + $180,000 - $165,000

Ending balance in accounts receivable = $57,400.00