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Grace [21]
2 years ago
6

Charleston, Inc. has Accounts Receivable of $280,000 and an Allowance for Doubtful Accounts of $18,000. If it writes-off a custo

mer account balance of $1,800, what is the amount of its net accounts receivable?
Business
2 answers:
hammer [34]2 years ago
6 0

Answer: $262,000

Explanation:

The Net Accounts Receivables refers to the amount that the customers of the company purchased on credit.

The Allowance for Doubtful Debt Account is the amount that's the company estimates it will not receive from it's credit customers so as to cater for the risk that some won't pay.

Net Accounts Receivables is therefore calculated by removing the Allowance for Doubtful Debt from the Accounts Receivables.

= Gross Accounts receivable - Allowance for Doubtful Accounts

= 280,000 - 18,000

= $262,000

It is worthy of note that the Customer balance written off of $1,800 will not be taken from the Accounts Receivables Account because it has already been catered for in the Allowance for Doubtful Debts. It will therefore be removed from the Allowance for Doubtful Debt Account.

Olegator [25]2 years ago
3 0

Answer:

$262,000

Explanation:

Allowance for Doubtful Accounts is deducted from the receivable balance on the balance sheet and shown as a deduction. As this is an contra account receivable account, which has a negative balance according to the account receivables balance. The value reported on the balance sheet is net of Allowance for Doubtful Account balance.

Journal Entry for Write off

Dr. Allowance for Doubtful Accounts $1,800

Cr. Account Receivable                       $1,800

Debit in Allowance for Doubtful Accounts and Credit in Account Receivables account will reduce their balances.

Allowance for Doubtful Accounts balance = $18,000 - $1,800 = $16,200

Account Receivable = $280,000 - $1,800 = $278,200

Net Account receivable = $278,200 - $16,200 = $262,000

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E. I, II, and IV only

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