The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,900. Total retained earnings at the end of Year 1 was $85,100. During Year 2, $1,900 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $170 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $213,000, and cash collections from receivables were $214,954. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. (1) Balance of Allowance for Doubtful Accounts at December 31, Year 2. 2. (2) Balance of Accounts Receivable at December 31, Year 2. 3. (3) Net realizable value of Accounts Receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2? Complete this question by entering your answers in the tabs below. Req A Req B and C Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.) RENUE SPA Horizontal Statements Model Assets Event Cash NRV Accounts Liabilities Receivable Bal. 0 85,100 1. 2a. + 2b. Equity Accounts Titles for Retained Retained Earnings Earnings 0 85,100 = + + + 213,000 Revenue 01+ (2,130) ° (2,130) Uncollectible accounts expense 80,846 0 295,970 Bal. 3. 4. 5. ° + (170) 213,000 (214,954)
The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance for Doubtful Accounts was $2,900. Total retained earnings at the end of Year 1 was $85,100. During Year 2, $1,900 of accounts receivable were written off as uncollectible. In addition, Renue unexpectedly collected $170 of receivables that had been written off in a previous accounting period. Services provided on account during Year 2 were $213,000, and cash collections from receivables were $214,954. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. (1) Balance of Allowance for Doubtful Accounts at December 31, Year 2. 2. (2) Balance of Accounts Receivable at December 31, Year 2. 3. (3) Net realizable value of Accounts Receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2? Complete this question by entering your answers in the tabs below. Req A Req B and C Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.) RENUE SPA Horizontal Statements Model Assets Event Cash NRV Accounts Liabilities Receivable Bal. 0 85,100 1. 2a. + 2b. Equity Accounts Titles for Retained Retained Earnings Earnings 0 85,100 = + + + 213,000 Revenue 01+ (2,130) ° (2,130) Uncollectible accounts expense 80,846 0 295,970 Bal. 3. 4. 5. ° + (170) 213,000 (214,954)
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...
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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.
Question
Transcribed Image Text:The accounts receivable balance for Renue Spa at December 31, Year 1, was $88,000. Also on that date, the balance in the Allowance
for Doubtful Accounts was $2,900. Total retained earnings at the end of Year 1 was $85,100. During Year 2, $1,900 of accounts
receivable were written off as uncollectible. In addition, Renue unexpectedly collected $170 of receivables that had been written off in
a previous accounting period. Services provided on account during Year 2 were $213,000, and cash collections from receivables were
$214,954. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period.
Required
a. Organize the information in accounts under an accounting equation.
b. Based on the preceding information, compute (after year-end adjustment):
1. (1) Balance of Allowance for Doubtful Accounts at December 31, Year 2.
2. (2) Balance of Accounts Receivable at December 31, Year 2.
3. (3) Net realizable value of Accounts Receivable at December 31, Year 2.
c. What amount of uncollectible accounts expense will Renue Spa record for Year 2?
Complete this question by entering your answers in the tabs below.
Req A
Req B and C
Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus
sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)
RENUE SPA
Horizontal Statements Model
Assets
Event
Cash
NRV
Accounts
Receivable
Liabilities
Bal.
0+
85,100
Equity
Retained
Earnings
Accounts Titles for Retained
Earnings
0+
85,100
1.
+
2a.
+
=
+
2b.
+
(170)
+
3.
+
213,000
+
213,000 Revenue
Bal.
4.
5.
(214,954)
01+
(2,130)
0+
(2,130) Uncollectible accounts expense
0
80,846-
0+
295,970
Req A
Req B and C >
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