Answered

A company has the following balances on December 31, 2021, after year-end adjustments: Accounts Receivable = $77,000; Service Revenue = $450,000; Allowance for Uncollectible Accounts = $5,000; Cash = $25,000. Calculate net accounts receivable.

Answer :

hyderali230

Answer:

$72,000

Explanation:

Allowance for Uncollectible Accounts is a value that a business estimates to be unrecoverable every year, company decided a percentage of receivable or credit sales to record this allowance.

As per given data

Accounts Receivable = $77,000

Service Revenue = $450,000

Allowance for Uncollectible Accounts = $5,000

Cash = $25,000.

Allowance for Uncollectible Accounts is a contra asst account and it has credit balance. Its balance is adjusted against the receivables value to make net receivable amount for the business.

Net Account Receivable = Accounts Receivable - Allowance for Uncollectible Accounts = $77,000 - $5,000 = $72,000

Other Questions