Schreiber Industries estimates bad debts at 2% of sales. Schreiber began the year with $270,000 of accounts receivable and $38,600 of allowance for bad debts. During the year, Schreiber had sales of $920,000, wrote off bad debts of $26,000, and received cash on account of $905,000. What amount of accounts receivable, net of allowance for bad debts, should appear on the year-end balance sheet?

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15 February, 11:46

Schreiber Industries estimates bad debts at 2% of sales. Schreiber began the year with $270,000 of accounts receivable and $38,600 of allowance for bad debts. During the year, Schreiber had sales of $920,000, wrote off bad debts of $26,000, and received cash on account of $905,000. What amount of accounts receivable, net of allowance for bad debts, should appear on the year-end balance sheet?

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Panther · Answer 1

The total amount of account receivable it's $246.400

Explanation:

At the beginning the company had $270.000 in the account receivable and $38.600 of allowance for bad debt, when the company wrote off bad debt, it entry a credit in the Account Receivable and a Debit in hte Allowance for bad debt.

The new balance are $244.400 in the accounts receivables and $12.600 as credit in the allowance for bad debt, with the new sales the company generate an extra account receivable of $15.000, so the net value of Accounts Receivable it's $246.400.