Question
1. (15 points) The following information pertains to R: Gross accounts receivable balance as of 01-01-16 was $75,000 Allowance for doubtful accounts balance as of
1. (15 points) The following information pertains to R:
Gross accounts receivable balance as of 01-01-16 was $75,000
Allowance for doubtful accounts balance as of 01-01-16 was $4,000
Total sales during 2016 (all sales were on a credit basis) were $870,000
AR write-offs during 2016 were $3,000
R's 12-31-16 AR aging analysis indicates a required balance in the allowance for doubtful accounts of $4,750.
The NRV of R's receivables as of 12-31-16 was $90,000.
a. On the basis of the above, how much cash did R collect from its ARs during 2016?
b. Assume R made entries for the facts presented in Question 1. Further assume that prior to making those entries, R's balance sheet indicated the following amounts:
TOTAL ASSETS:$2,500,000
TOTAL LIABILITIES$450,000
TOTAL OWNERS' EQUITY$2,050,000
After recording the entries for the facts presented in Question 1, identify the following amounts for R:
TOTAL ASSETS:$
TOTAL LIABILITIES$
TOTAL OWNERS' EQUITY$
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Auditing and Assurance services an integrated approach
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
14th Edition
133081605, 132575957, 9780133081602, 978-0132575959
