Tyler Service Co. experienced the following transactions for 2014, its first yea

Question

Tyler Service Co. experienced the following transactions for 2014, its first year of operations:

  

Organize the information in accounts under an accounting equation

Prepare the income statement for Tyler Service Co. for 2014.

What is the net realizable value of the accounts receivable at December 31, 2014?

1. Provided $86,000 of services on account. 2. Collected $72,000 cash from accounts receivable. 3. Paid $39,000 of salaries expense for the year. 4. Tyler adjusted the accounts using the following information from an accounts receivable aging schedule:

Explanation / Answer

Number of Days

Tyler Services Co

Number of Days

Amount Percent Likely to Allowance       Past Due Be Uncollectible Balance    Current 7,500 0.01 0.75    0-30 2,000 0.05 1    31-60 1,500 0.1 1.5    61-90 1,000 0.3 3    Over 90 days 2,000 0.5 10 Total 14,000 16.25 a Accounting equation Revenue = Accounts Receivable + Cash Collected + Allowance for doubtful debts + Bed debt expense 86000 = 14000 + 72000 +    -16.25 + 16.25 b Tyler Services Co Income statement 2014 Details Amt $ Service revenue            86,000 Less salalry expense            39,000 Less : Bad debt expense                    16 Net Income            46,984 c Net realizable value of accounts receivable on Dec 31 2014 = AR value less Allowance for doubtful receivables = 14000-16.25= $ 13,983.75

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.