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Credit Sales were $ 1 4 . 5 million in the prior year, and $ 1 3 million in the current year. Net Accounts receivable
Credit Sales were $ million in the prior year, and $ million in the current year.
Net Accounts receivable were $ million at the start of last year, and $ million at the start
of this year. The allowance for doubtful accounts was $ at the beginning of this year.
At the end of the current year, accounts receivable balances were as follows:
During the year, the following transactions occurred:
i Wrote off $ from the Department of Forestry as uncollectable.
ii Unexpectedly received $ from the bankruptcy trustee for Paragon Homes, as this
company went bankrupt a few years ago and the balance of their accounts receivable
had been written off many years ago.
REQUIRED:
Show all transactions posted the Allowance for Doubtful Account and Bad Debts
Expense during the year.
What is the ending balance of Bad Debts for the year?
How long did it take on average to collect an accounts receivable in last year
compared to the current year? Did the time it took to collect Accounts
Receivable increase or decrease in the current year compared to the prior year?
What can a company do just before year end to improve the "Average Number of
Days for an Accounts Receivable"?
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