Question

Arbour Inc. had the following balances on its balance sheet at the beginning of year 4. The balances in the two accounts are "normal" (so Accounts receivable is a positive asset and the allowance is a negative asset). Note that net realizable value is NOT an account balance. It is Accounts receivable net of the allowance balance.

Accounts Receivable.................................61000
Allowance for uncollectible accounts........7300
Net realizable value...................................53700

During the year, Arbour recorded the following:
--Sales on account of..................... $660000
--Collections on account of............ $633600
--Write-offs of delinquent accounts.... $18700

At the end of Year4, Arbour Company recorded an adjusting entry that recognized $19800 of bad debt expense.

Enter all normal balances as positive numbers (just a number, no + sign.)

1. What would be the balance in Accounts Receivable after all of the entries above?

2. What would be the balance in the Allowance for Uncollectible Accounts after all of the entries above?

Answer 1

A	Balance in Accounts Receivable
	Opening Balance	$             61,000.00
	Sales on account	$          660,000.00
	Collections on account	$        (633,600.00)
	Write-offs of delinquent accounts	$          (18,700.00)
	Ending Balance	$             68,700.00

B	Balance in the Allowance for Uncollectible Accounts
	Opening Balance	$               7,300.00
	bad debt expense.	$             19,800.00
	Write-offs of delinquent accounts	$          (18,700.00)
	Ending Balance	$               8,400.00