Respuesta :
Answer:
b. $ 16,940
Explanation:
First we need to determine the allowance for uncollectible accounts to be made for the year.
Allowance for uncollectible revenue is 1 % of revenue on account.
Revenue on account is $ 86,000 so the allowance for uncollectible accounts is $ 86,000 * 1 %= $ 860
The gross receivable value is amount of revenue on credit less the collections
Revenue on credit $ 86,000
Less: collections on account $ 68,200
Gross receivables $ 17,800
Less Allowance for uncollectible accounts $( 860)
Net Realizable value of receivables $ 16,940
Answer:
b. $16, 940
Explanation:
The allowance for bad debt is an account used to estimate how much of the receivables recorded by an entity may become uncollectible.
However, once debts are determined to have gone bad and have not been provided for previously, the entries to be posted will be between the bad debt and account receivables.
Given that Revenue earned was $86,000 on account and cash collected was $68,200
Then account receivables balance
= $86,000 - $68,200
= $17,800
If the company estimates that it will be unable to collect 1% of revenue on account, this amounts to
= 1% of $86,000 = $860
The amount of net realizable value of receivables on the December 31, Year 1 balance sheet would be
= $17,800 - $860
= $16,940
