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estimates the allowance for uncollectible accounts at 3% of the balance of accounts receivable. During 2020, Van Dijk wrote off $89,300 of accounts receivable and collected $23,770 on accounts previously written off. Bad debt expense for 2020 was $169,000. The balance in accounts receivable was $7,280,000 at 12/31/2020. What was the balance in accounts receivable at 1/1/2020?

Answer :

Answer:

The balance in account receivable will be "$4623333".

Explanation:

Balance of payments allowance at 31/12/2020,

= [tex]7280000\times 3 \ percent[/tex]

= $[tex]218400[/tex]

Bad dept expense = $169,000

Wrote off of account = $89,300

As we know,

Balance of payments allowance at 1/1/2020 = Balance of payments allowance at 31/12/2020 - Bad debt expense for 2020 + Wrote off

On putting the values in the above formula, we get

⇒                                 = [tex]218400-169000+89300[/tex]

⇒                                 = $[tex]138700[/tex]

Now,

Account receivable balance at 1/1/2020,

= [tex]\frac{13700}{0.3}[/tex]

= $[tex]4623333[/tex]

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