Question

At the end of the prior year, Durney's Outdoor Outfitters reported the following information.

Accounts Receivable, Dec. 31 prior year
Accounts Receivable (Gross) (A) $ 48,271
Allowance for Doubtful Accounts (XA) 8,469
Accounts Receivable (Net) (A) $ 39,802
During the current year, sales on account were $306,548, collections on account were $290,700, write-offs of bad debts were $7,054, and the bad debt expense adjustment was $4,770.

Required:

1-a. Complete the Accounts Receivable and Allowance for Doubtful Accounts T-accounts to determine the balance sheet values. Disregard income tax considerations.

1-b. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the income statement and balance sheet for the current year. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Answer:

Please find the detailed answer and explanation below.

Explanation:

1a

                          Accounts Receivables    

Particulars      Amount($)  Particulars                       Amount($)

Beginning Bal. 48,271  Collections on accounts 290,700

Sales on account 306,548  Bad debts written off             7,054

                                   Balance c/d                           57,065

        Total                       354,819                                             354,819

Ending Balance  57,065    

     

     

                 Allowance for Doubtful accounts

       Particulars                 Amount($) Particular                 Amount($)    

Bad debt written off 7,054  Beginning Balance  8,469

Balance c/d                  6,185   Bad debt expense 4,770

Total                         13,239                                  13,239

                                            Ending Balance          6,185

1b

                               Durney's Outdoor Outfitters

                                Income Statement (Partial)

                             For the year ended December 31

Operating Expense:

Bad debt Expense                                   $4,770

                                 Durney's Outdoor Outfitters

                                     Balance Sheet (Partial)

                             For the year ended December 31

Current asset:

Accounts receivable                                $57,065

Allowance for Doubtful Accounts           ($6,185)

Accounts receivables(Net)                       $50,880