Question

Home Company provided the following transactions affecting accounts receivable during the current year:

Sales cash and credit. = 5,900

Cash received from credit customers, all of whom took advantage of the discount feature of the credit terms 4/10,n/30. = 3,024

Cash received from cash customers. = 2,100

Accounts receivable written off as worthless. = 50

Credit memorandum issued to credit customers for sales returns and allowances. = 250

Cash refunds given to cash customers for sales returns and allowances. = 20

Recoveries on accounts receivable written off as uncollectible in prior periods not included in cash received from credit customers. = 80

Balances on January 1

Accounts receivable. = 950

Allowance for doubtful accounts. = 100

The entity provided for uncollectible accounts by crediting allowance for doubtful accounts in the amount of 70 for the current year.

Required:

1. What amount should be reported. as accounts receivable on December 31?

Choices:

a. 1,300

b. 1,426

c. 1,280

d. 1,220

2. What amount should be reported as allowance for doubtful accounts on December 31?

Choices:

a. 120

b. 200

c. 250

d. 170