At the beginning of year 3, Randall company had a $18,600 balance in its account receivable...

Question:

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:

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:-

Account Receivables
Dr. Cr.
Date Particulars Amount Date Particulars Amount
Beginning Balance $18,600 Cash $15,130
Service Revenue $26,900 Allowance for bad debt (bad debt written-off) $770
Ending Balance $29,600
$45,500 $45,500
Allowance for Bad Debt Expense Account
Dr. Cr.
Date Particulars Amount Date Particulars Amount
Bad debt written-off $770 Beginning Balance $1,020
Ending Balance $1,138 Allowance for Bad debt ($29,600 x 3%) $888
$1,908 $1,908


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Accounts Receivable Journal Entries

from Financial Accounting: Homework Help Resource

Chapter 3 / Lesson 20
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