Question
Use the following information to answer the three questions below. Accounts Receivable section of Data & Company's balance sheet: Date & Company Balance Sheet (Partial)
Use the following information to answer the three questions below.
Accounts Receivable section of Data & Company's balance sheet:
Date & Company
Balance Sheet (Partial)
January 1, 2022
Accounts Receivable 750,000
Less: Allowance for Doubtful Accounts 50,000
Net Accounts Receivable 700,000
During 2022, the company had the following transactions related to receivables:
| a. | Sales on account | 8,500,000 |
| b. | Sales returns | 75,000 |
| c. | Collected on receivables with a gross value of : (excludes 2% discount taken by customers) | 7,000,000 |
| d. | Wrote off accounts receivable deemed uncollectible | 50,000 |
| e. | Recovery of bad debts previously written off | 5,000 |
| f. | Data & Co. estimates that 2% of the year-end accounts receivable will be uncollectible. |
What is the year-end balance for Allowance for Doubtful Accounts (use whole numbers)?
What is the account receivable turnover for 2022 (round to 1 decimal point) (Hint: Calculate the Net Sales number. Do not forget to consider the sales discount in "c" above)?
What is the average collection period for 2022 (round to 1 decimal point)?
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Sawyer's Internal Auditing The Practice Of Modern Internal Auditing
Authors: Lawrence Sawyer, Mortimer Dittenhofer, James Scheiner
5th Edition
0894131788, 978-0894131783
