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Uncollectible Accounts Receivable: [201280Q5022320] Merle Company sells only on account and had a balance in its Accounts Receivable [AR] account at the start of Year
Uncollectible Accounts Receivable: [201280Q5022320] Merle Company sells only on account and had a balance in its Accounts Receivable [AR] account at the start of Year 2 of $1,300. The balance in the Allowance for Uncollectible Accounts [AUA) at the start of Year 2 was $85. In Year 2, the firm had credit sales of $6,700 and collections on account of $5,600. Write-offs and recoveries of previous write-offs in Year 2 were $360 and $35, respectively. In Year 3, the firm had credit sales of $7,900 and collections on account of $7,200. Write-offs and recoveries of previous write-offs in Year 3 were $410 and $45, respectively. When using the percentage of sales method, assume that Merle has properly estimated that 5% of its credit sales in Years 2 and 3 will be uncollectible. Alternatively, when using the aging method, assume the firm had estimated at the end of Year 1 that $1,215 of its AR would be collectible. One year later, at the end of Year 2, the firm's management properly estimated that the firm would not be able to collect $110 of its AR. At the end of Year 3, the firm estimated that the firm would be able to collect $2,180 of its AR balance. Required: $ _ Determine the carrying value of AR for Merle at the end of Year 2 when using the percentage of sales method. Determine the balance in the AUA account at the end of Year 3 when using the percentage of sales method. $ _ Determine the carrying value of AR for Merle at the end of Year 2 when using the aging method. Determine the balance in AUA for Merle at the end of Year 3 when using the aging method. Mwh 022320
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