Question

At the beginning of the year, accounts receivable were $158,000 and the allowance for bad debts was $12,900. During the year, sales (all on account) were $614,000, cash collections were $594,000, bad debts expense totaled $18,400, and $13,400 of accounts receivable were written off as bad debts. Required: Calculate the balances at the end of the year for the Accounts Receivable and Allowance for Bad Debts accounts. (Hint: Use T-accounts to analyze each of these accounts, plug in the amounts that you know, and solve for the ending balances.)

Answer 1

Answer:

Accounts Receivable is = $164,600

Allowance for bad debts = $17,900

Explanation:

Given data:

Receivable amount = $158,000

Bad debts allowance =$12,900

sales = $614,000

cash collection =$594,000

Bad debts expense =$18,400

Account receivable as bad debt = $13,400

from the information given

Accounts Receivable is = $158,000+ $614,000 - $594,000 -$13,400

Accounts Receivable is = $164,600

Allowance for bad debts = $12,900 + $18400 - $13,400

Allowance for bad debts = $17,900