Consider the following facts for Company A in 2013: - Accounts Receivable accoun

Question

Consider the following facts for Company A in 2013:

- Accounts Receivable account balance at December 31, 2013 = $250,000.
- Allowance for Doubtful Accounts balance at December 31, 2013 = $12,000.

During 2014, the following accounts receivable-related transactions occurred:

- Sales on account = $2,500,000
- Sales returns and allowances = $45,000
- Collections of accounts receivable = $2,250,000
- Write-offs of accounts receivable deemed uncollectible = $15,000
- Recovery of bad debts previously written off as uncollectible = $4,000

After all the journal entries related to these transactions have been posted to the general ledger, which of the following statements is true?

a. The total debits recorded in the Accounts Receivable account to reflect these transactions is equal to $2,314,000.

b. The Net Realizable Accounts Receivable balance will be $439,000

c. The Allowance for Doubtful Accounts balance will be a $2,000 debit.

d. The balance in the Accounts Receivable account will be $350,000.

e. None of these answers are correct

Explanation / Answer

None of the answers ar correct

Opening Credit sales Sales Returns Collection Net Accounts Receivable 2,50,000.00              25,00,000.00                                       45,000.00       22,50,000.00 4,55,000.00 Allownces for doubtful debts            12,000                            3,000            15,000 4,40,000.00

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