Question

Accounts receivable, 1/1/X2 $ 650,000 Credit sales for 20X2 2,700,000 Sales returns for 20X2 75,000 Accounts written of during 20X2 40,000 Collections from customers during 20X2 2,150,000 Estimated future sales returns at 12/31/X2 50,000 Estimated uncollectible accounts at 12/31/X2 110,000 What amount should Jay report for accounts receivable, before allowances for sales returns and uncollectible accounts, at December 31, 20X2?

Answer 1

gross account receivable: 1,085,000

net account receivable: 925,000

Step-by-step explanation:

Before adjustment, will be the gross account receivables, after subtracting the allowance account we got the net account receivable.

Beginning Account Receivable: 650,000

Credit sales for the period: 2,700,000

Sales Return (75,000)

Collection from the customers (2,150,000)

write-off receivables: (40,000)

Account receivables (gross) 1,085,000

Allowance for uncollectible

and returns: (160,000)

Account Receivable (net) 925,000