At January 1, 2014, ramous Thirty Three company reported accounts receivable of

Question

At January 1, 2014, ramous Thirty Three company reported accounts receivable of $100,000 and the allowance for doubtful accounts had a $15,000 credit balance, ramous Thirty Three company records bad debt expense using the net credit sales method and estimates that 5% of its credit sales each year will prove to be uncollectible. Famous Thirty Three Company reported the following information for 2014 and 2015 At December 31, 2015, ramous Thirty Three Company's net realizable value of accounts receivable totaled $67,200. Calculate ramous Thirty Three Cosrpany's accounts receivable balance at December 31, 2014. Do not use decimals in your answer.

Explanation / Answer

Position at Dec 31 2014 Allowance for doubtful accounts                  29,900.00 write Off                     9,400.00 Recoveries                     4,700.00 Net write off debited to Allowance for Doubtful a/c                     4,700.00 So net credit balance at Dec 31 2014. before write off the Allowance a/c=29900+4700                  34,600.00 Jan 1 2014. credit balance in Allowance a/c                  15,000.00 Net Addition for bad debt expense provosion during 2014                  19,600.00 Bad debt expense is 5% of credit sales Net credit sales in 2014=19600/5%                392,000.00 So Accounts Receivable Balance on Jan 1.2014.                100,000.00 Add Net Credit sales in 2014                392,000.00 Less Cash collection from customers in 2014                370,000.00 Accounts receivable balance as on Dec 31.2014. $            122,000.00

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