Question
The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance for Doubtful
The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,100. During Year 2, $2,100 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $160 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $215,000, and cash collections from receivables were $216,972. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period.
Required
- Record the transactions in general journal form and post to T-accounts.
- 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.
- What amount of uncollectible accounts expense will Renue report for Year 2?
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