On January 1, 2016, Kincaid Company\'s Accounts Receivable and the Allowance for
ID: 2581998 • Letter: O
Question
On January 1, 2016, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $65,400 and $1,700, respectively. During the year Kincaid reported $162,000 of credit sales. Kincaid wrote off $1,350 of receivables as uncollectible in 2016. Cash collections of receivables amounted to $178,900. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.
On January 1, 2016, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $65,400 and $1,700, respectively. During the year Kincaid reported $162,000 of credit sales. Kincaid wrote off $1,350 of receivables as uncollectible in 2016. Cash collections of receivables amounted to $178,900. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.
Explanation / Answer
1 Amount of uncollectible accounts expense = 162000*1% = 1620 2 Allowance for Doubtful Accounts 1350 Accounts Receivable 1350 3 Uncollectible accounts expense/Bad debts expense 1620 Allowance for Doubtful Accounts 1620 4 Accounts Receivable ending balance =65400+162000-1350-178900= 47150 Allowance for Doubtful Accounts ending balance = 1700+1620-1350= 1970 Net realizable value of recievables = 47150-1970= 45180