At December 31, 2013, Dustin Company reported this information on its balance sh
ID: 2379774 • Letter: A
Question
At December 31, 2013, Dustin Company reported this information on its balance sheet.
Accounts receivable $960,000 Less: Allowance for doubtful accounts 78,000
During 2014, the company had the following transactions related to receivables.
1.Sales on account $3,600,000
2. Sales returns and allowances 150,000
3. Collections of accounts receivable 3,100,000
4. Write-offs of accounts receivable deemed uncollectible 92,000
5. Recovery of bad debts previously written off as uncollectible 28,000
Instructions
Compute the accounts receivable turnover and average collection period.
Explanation / Answer
DEBIT CREDIT
Accts Rec 3,200,000
Sales 3,200,000
Sales 50,000
Accts Rec 50,000
Bank 281,000
Accts Rec 281,000
Bad Debt 90,000
Accts Rec 90,000
Bank 24,000
Bad Debt 24,000