Question
Exercise 7-12 Write-Off of Accounts Receivable Maxim Company, which uses the allowance method, has accounts receivable of $130,000 and an Allowance for Uncollectible Accounts of
Exercise 7-12 Write-Off of Accounts Receivable
Maxim Company, which uses the allowance method, has accounts receivable of $130,000 and an Allowance for Uncollectible Accounts of $12,800 (credit). The company sold merchandise to Olga Boruc for $14,400 and later received $4,800 from Boruc. The rest of the amount due from Hegerman had to be written off as uncollectible.
Using T accounts, show the beginning balances and the effects of the Boruc transactions on Accounts Receivable and Allowance for Uncollectible Accounts.
| Accounts Receivable | |||
|---|---|---|---|
| Bal. | |||
| Sale | Collection | ||
| Bal. | |||
| Write-off | |||
| Bal. | |||
| Allowance for Uncollectible Accounts | |||
|---|---|---|---|
| Write-off | Bal. | ||
| Bal. | |||
What is the amount of net accounts receivable before and after the write-off?
| Net accounts receivable | |
| Before Write-off: | $ |
| After Write-off: | $ |
|
|
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Quality Assessment Manual For The Internal Audit Activity
Authors: The Internal Audit Foundation
2017 Edition
0894139975, 978-0894139970
