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After aging the Accounts Receivable, it is estimated that $2,450 will not be collected, and the...

Question:

After aging the Accounts Receivable, it is estimated that {eq}\$2,450 {/eq} will not be collected, and the Allowance account has an existing debit balance of {eq}\$300 {/eq}. If Accounts Receivable is {eq}\$107,000 {/eq}, the net receivables would be {eq}\rule{1cm}{0.15mm} {/eq}.

(a) {eq}\$107,000 {/eq}

(b) {eq}\$106,900 {/eq}

(c) {eq}\$104,550 {/eq}

(d) {eq}\$104,250 {/eq}

Account Receivable:

Account receivable is the amount yet to be received from the market, which is due because of credit sales made. Managing the receivable is a big task for the management because it can block the major cash flows from the operations.

Answer and Explanation:

Option (d) $104,250 is correct.

Computation of net receivable

Particular Amount
Account Receivable $107,000
Less: Estimated Bad debts ($2,450)
Less: Debit balance of allowance account ($300)
Net receivable $104,250

Learn more about this topic:

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Accounts Receivable: Definition, Process & Examples

from Accounting 101: Financial Accounting

Chapter 7 / Lesson 1
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