Question
Hawky Dawky Ltd. began operations on July 1, 2020 and had the following sales and collection activities during 2020: Sale to Customer 1 on August
Hawky Dawky Ltd. began operations on July 1, 2020 and had the following sales and collection activities during 2020:
Sale to Customer 1 on August 1, 2020 $ 170000
Collections from Customer 1 during the year 52000
Sale to Customer 2 on November 1, 2020 86000
Collections from Customer 2 during the year 76000
Sale to Customer 3 on November 15, 2020 72000
Collections from Customer 3 during the year 55000
There were no other transactions during the year. Hawky Dawky Ltd. offers its customers terms of 2/10 net 30. Assume that any amounts customers paid was after the 10-day discount period.
Hawky Dawky estimates that the likelihood of not being able to collect an accounts receivable is as follows
Accounts not yet due 2 %
Accounts overdue but less than 60 days overdue 7 %
Accounts overdue more than 60 days 15 %
Calculate the net balance of accounts receivable at the end of the year
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