At the beginning of year 3, Randall company had a $18,600 balance in its account receivable account and a $1020 balance in allowance for doubtful accounts. During year 3, Randall experienced the following events. Randall earned $26,900 of revenue on account. Collected $15,130 cash from accounts receivable. Wrote off $770 of accounts receivable as uncollectible. Randall estimates uncollectible accounts to be 3% of receivables. Based on this information the December 31, year 3 balance in the accounts receivable account is what?
Account receivables are the current asset for the company which is recorded in the current asset section in the balance sheet. The account receivables are shown at the net value.
Answer and Explanation:
As on December 31, year 3 balance in the accounts receivable account is $$43,592.
Explanation: As on December 31, year 3 balance in the accounts receivable account is $$43,592 ($45,500 - $1,908).
Working Notes: Compute ending account receivables and ending allowance for doubtful debts as follows:-
|Service Revenue||$26,900||Allowance for bad debt (bad debt written-off)||$770|
|Allowance for Bad Debt Expense Account|
|Bad debt written-off||$770||Beginning Balance||$1,020|
|Ending Balance||$1,138||Allowance for Bad debt ($29,600 x 3%)||$888|
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from Financial Accounting: Homework Help ResourceChapter 3 / Lesson 20