A portion of the current assets section of the December 31, 2019, balance sheet for Gibbs Co.

Question:

A portion of the current assets section of the December 31, 2019, balance sheet for Gibbs Co. is presented here:

The company?s accounting records revealed the following information for the year ended December 31, 2020:

Sales (all on account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? ? $2,600,000Cash collections from customers. . . . . . . . . . . . . . . . . . . . ? ? 2,375,000Accounts written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? ? 30,000Bad debts expense (accrued at 12/31/20). . . . . . . . . . . . . ? ? 41,000

Required:

Calculate the net realizable value of accounts receivable at December 31, 2020, and prepare the appropriate balance sheet presentation for Gibbs Co. as of that point in time. Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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