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Renue Spa had the following balances as of December 31 , Year 1: Accounts receivable was $87,000, allowance for doubtful accounts was $2,100 and total
Renue Spa had the following balances as of December 31 , Year 1: Accounts receivable was $87,000, allowance for doubtful accounts was $2,100 and total retained earnings at the end of Year 1 was $84,900. During Year 2 the company experienced the following events: 1. Accounts receivable in the amount of $2,600 were written off as uncollectible. 2. Collected $200 of receivables that had been written off in a previous accounting period. 3. Provided $216,000 worth of services on account during Year 2. 4. Cash collections from receivables were $217,982 during Year 2. 5. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. Balance of allowance for doubtful accounts at December 31, Year 2. 2. Balance of accounts receivable at December 31, Year 2. 3. Net realizable value of accounts receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2? Complete this question by entering your answers in the tabs below. Organize the information in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. Leave cells blank if no input is needed. Based on the preceding information, compute (after year-end adjustment): b-1. Balance of allowance for doubtful accounts at December 31, Year 2. b-2. Balance of accounts receivable at December 31, Year 2. b-3. Net realizable value of accounts receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2
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