Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The accounts receivable balance for Renue Spa at December 3 1 , Year 1 , was $ 8 2 , 0 0 0 . Also

The accounts receivable balance for Renue Spa at December 31, Year 1, was $82,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,300. Total retained earnings at the end of Year 1 was $79,700. During Year 2,$2,500 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $190 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $218,000, and cash collections from receivables were $220,000. 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 amont of uncollectible accounts expense will Renue Spa record for Year 2?
The accounts receivable balance for Renue Spa at December 31, Year 1, was $82,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,300. Total retained earnings at the end of Year 1 was $79,700. During Year 2,$2,500 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $190 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $218,000, and cash collections from receivables were $220,000. 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.
Req A
Req B and C
Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)
\table[[RENUE SPA],[Horizontal Statements Model],[Event,Assets,=,Liabilities,+,\table[[Equity],[Retained],[Earnings]],\table[[Accounts Titles for Retained],[Earnings]]],[Cash,+,\table[[\table[[NRV Accounts],[Receivable]]]]],[Bal.,0,+,79,700,=,0,+,79,700,],[1.,0,+,0,=,0,+,0,],[2a.,0,+,218,000,=,0,+,218,000,Revenue],[2b.,190,+,(190),=,0,+,,],[3.,0,+,,=,,+,s.,Uncollectible accounts expense],[4.,220,000,+,(220,000),=,0,+,0,],[5.,0,+,0,=,0,+,0,],[Bal.,220,190,+,77,510,=,0,+,297,700,]]
The accounts receivable balance for Renue Spa at December 31, Year 1, was $82,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,300. Total retained earnings at the end of Year 1 was $79,700. During Year 2,$2,500 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $190 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $218,000, and cash collections from receivables were $220,000. 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) Balanc
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Practical Guide To Accountancy

Authors: Ajit Kumar Chattopadhyay, Amalendu Mukhopadhyay

1st Edition

1642874264, 9781642874266

More Books

Students also viewed these Accounting questions

Question

How does selection differ from recruitment ?

Answered: 1 week ago

Question

draft a research report or dissertation;

Answered: 1 week ago