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At the beginning of the year, accounts receivable were $158,000 and the allowance for bad debts was $12,900. During the year, sales (all on account)
At the beginning of the year, accounts receivable were $158,000 and the allowance for bad debts was $12,900. During the year, sales (all on account) were $614,000, cash collections were $594,000, bad debts expense totaled $18,400, and $13,400 of accounts receivable were written off as bad debts. Required: Calculate the balances at the end of the year for the Accounts Receivable and Allowance for Bad Debts accounts. (Hint: Use T-accounts to analyze each of these accounts, plug in the amounts that you know, and solve for the ending balances.)
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