Schreiber Industries estimates bad debts at 2% of sales. Schreiber began the year with $270,000 of...

Schreiber Industries estimates bad debts at 2% of sales. Schreiber began the year with $270,000 of account receivable and $38,600 of allowance of bad debts. During the year, Schreiber had sales of $920,000, wrote off bad debts of $26,000, and received cash on account of $905,000. What amount of accounts receivable, net allowance for bad debts, should appear on the year-end balance sheet?

Expert Solution

Account Receiavble	270,000
Allowance for bad debt	38,600
Current year sales	920,000
Bad Debt	2%
Bad debts written off	26,000
Cash Received	905,000
Bad debt (For cy Sales)	18,400
Allownace for Bad Debt Balance amount after adj. of bad debt written off	12,600
Bad Debt provision to be created for cy	5,800

Accounts Receivable	opening balance -Bad debt written off +cy sales-Collection in cy
	259,000
Allowance for bad debt	18,400

ekkarill92 answered 2 years ago

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