1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
viva [34]
3 years ago
6

18.On January 1, 2016, the Accounts Receivable and the Allowance for Uncollectible Accounts for Darius Company carried balances

of $20,000 and $550 respectively. During the year, the company reported $70,000 of credit sales. There were $400 of receivables written off as uncollectible in 2016. Cash collections of receivables amounted to $74,700. The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance.
Required:
Part 1) The amount of bad debts expense recognized in the 2016 income statement will be __________.
Part 2) The net realizable value of receivables appearing on the 2016 balance sheet will amount to ___________.
Business
1 answer:
Kisachek [45]3 years ago
7 0

Answer:

Part 1) The amount of bad debts expense recognized in the 2016 income statement will be $400.

Part 2) The net realizable value of receivables appearing on the 2016 balance sheet will amount to $ 14,155

Explanation:

<em>Bad Debts</em> are closed off to Trade Receivables accounts and they are an expense in the Income Statement

To find the Accounts Receivable Balance at year end, we open a Total <em>Accounts Receivable - T Account</em> and Balance it off.

Note :Allowances for Doubtful Debts are not recorded in this Account

Debits :

January 1, 2016 Accounts Receivable                                  $20,000

Credit sales                                                                            $70,000

Totals                                                                                      $90,000

Credits:

Bad Debts Written Off                                                                 $400

Cash collections                                                                      $74,700

December 31,  Accounts Receivable (<em>Balancing Figure</em>)    $14,900

Totals                                                                                       $90,000

Allowances for Doubtful debts are at 5% of the year-end accounts receivable balance, therefore amount to reduce the Accounts Receivables is $14,900 × 5% = $745

<u>Net realizable value of receivables </u>:

=$14,900 -  $745

=$ 14,155

You might be interested in
Which calculation is needed to assess the component pieces of the operating section using the direct approach for the amount col
amid [387]

Calculation  needed to assess the component pieces of the operating section using the direct approach for the amount collected for sales is

Total potential cash - Ending accounts receivable balance.

Cash that is produced by a company's regular operating procedures is known as operating cash flow. Investors place a high value on a company's capacity to continually produce positive cash flows from its ongoing business operations.

The purpose of drawing up a cash flow statement is to see a company's sources and uses of cash over a specified time period.

You should first subtract any receivables that you are aware are unlikely to be collected before calculating cash collections from accounts receivable. This will leave you with your projected collectible accounts receivable.

To learn more about operating cashflow click here :

brainly.com/question/21322525

#SPJ4

8 0
2 years ago
Classified ads are printed only in newspapers. True False
katovenus [111]
The answer is false i hope this helps :3
4 0
3 years ago
Read 2 more answers
Taylor Entertainment Center has 5 TVs on hand at the balance sheet date that cost $400 each. The net realiz- able value is $350
faltersainse [42]

Answer:

Under the lower-of-cost-or- net realizable value basis of accounting for inventories, the value that Taylor should report for the TVs on the balance sheet is $350 × 5 = $1,750

Explanation:

The lower-of-cost-or- net realizable value basis of accounting for inventories values inventory at the lower of its cost or net realizable value. This basis of accounting gives a <em>faithful representation</em> to the users of the value of assets in inventory that firm holds. This is  also <em>prudent</em> in that profits are not overstated in the Income statement.

4 0
3 years ago
To recover damages in a breach-of-contract case, the plaintiff must demonstrate that he used reasonable efforts to minimize the
Aleonysh [2.5K]
It's is true wait yeah it's A true
5 0
3 years ago
What Amendments make up what are known as the Miranda Rights?
pantera1 [17]
I believe its B) the fourth and fifth
3 0
2 years ago
Read 2 more answers
Other questions:
  • Which of the following statements is FALSE? Global bonds combine the features of domestic, foreign, and Eurobonds, and are offer
    13·1 answer
  • What is a projection?
    9·2 answers
  • If Congress cuts spending to balance the federal budget, the Fed can act to prevent unemployment and recession by
    10·1 answer
  • Four years ago, Mr. B sold his personal property on contract for $200,000, which resulted in a capital gain of $100,000. Mr. B p
    11·1 answer
  • Munoz Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different u
    8·1 answer
  • 1. PROVIDE A BRIEF INTRODUCTION FOCUSING ON YOUR EDUCATION, CAREER, AND DECISION TO APPLY TO UNIVERSITY OF THE CUMBERLANDS.2. IN
    12·1 answer
  • TIME REMAINING<br> 01:59:06<br> What does the information demonstrate about Alex's<br> investments?
    10·2 answers
  • PLEASE HELP! 100 points for just the question
    10·2 answers
  • Describe the branding strategies used by Hormel and how Justin's products fit into the Hormel product line.
    14·1 answer
  • Which best describes the role of financial planning?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!