Blue Spruce Corp. unadjusted trial balance includes the following balances (assume normal balances): • Accounts Receivable $1160000 • Allowances for Doubtful Accounts $24900 Bad debts are estimated to be 5% of outstanding receivables. What amount of bad debt expense will the company record? $55678 $31822 $58000 $33100
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Blue Spruce Corp. unadjusted
|
• |
Accounts Receivable |
$1160000 |
|
• |
Allowances for Doubtful Accounts |
$24900 |
$55678
$31822
$58000
$33100
The financial statements of the Wildhorse Co. report net sales of $384000 and accounts receivable of $48000 and $36000 at the beginning of the year and the end of the year, respectively. What is the average collection period for accounts receivable in days? (Use 365 days for calculation.)
50.0
39.9
80.4
29.7
Windsor, Inc. had net credit sales during the year of $1128800 and cost of goods sold of $448000. The balance in accounts receivable at the beginning of the year was $122400 and at the end of the year was $149600. What was the accounts receivable turnover?
8.3
10.3
5.1
7.0
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