Question
Becky had net sales (all on account) in 2014 of $600,000. At December 31, 2013, before adjusting entries, the balances in selected accounts were: accounts
Becky had net sales (all on account) in 2014 of $600,000. At December 31, 2013, before adjusting entries, the balances in selected accounts were: accounts receivable $750,000 debit, and allowance for doubtful accounts $1,500 debit. Becky estimates that 3% of its net sales will prove to be uncollectible. What is the net realizable value of the receivables reported on the financial statements at December 31, 2014?
MY QUESTIONS IS WHY DONT I ADD THE $600,000 OF NET SALES in 2014 TO ACCOUNT RECEIVABLE? MEANING WHY DONT I ADD $600,000 TO $750,000 ?
I understand:
ACCOUNT RECEIVABLE 750,000
LESS ALLOWANCE OF DOUBTFUL ACCOUNTS IS $16,500
NET REALIZABLE VALUE IS $733,500
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