Question

The following information is from the records of Pangolin Camera​ Shop: Accounts​ Receivable, December​ 31, 2017 $20,000​(debit) Allowance for Bad​ Debts, December​ 31, 2017 prior to adjustment 1,000​ (debit) Net credit sales for 2017 91,000 Accounts written off as uncollectible during 2017 450 Bad debts expense is estimated by the agingminus−ofminus−accountsminus−receivables method. Management estimates that $3,150 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts

. A. $15,850 B. $16,850 C. $15,400 D. $ $17,850

Answer 1

B. $16,850

Step-by-step explanation:

The answer it's $16,850 because the balance of accounts receivable at December 31, 2017 it's $20,000 (net of the total movements occured during 2017) and the total balance of allowance for bad debts it's estimated to be $3,150, so the Net Accounts Receivable is $20,000 - $3,150 = $16,850

• Pangolin Camera​ Shop: Accounts​ Receivable, December​ 31, 2017 $20,000​(debit)

Dr Accounts receivable $ 20,000

• Allowance for Bad​ Debts, December​ 31, 2017 prior to adjustment 1,000​ (debit)

Dr Allowance for Uncollectible Accounts $ 1,000

• Net credit sales for 2017 91,000

Dr Accounts receivable $ 91,000

Cr Sales $ 91,000

• Accounts written off as uncollectible during 2017 450

Dr Allowance for Uncollectible Accounts $ 450

Cr Accounts receivable $ 450

• Management estimates that $3,150 of accounts receivable will be uncollectible

Dr Bad Debt Expense $ 3,150

Cr Allowance for Uncollectible Accounts $ 3,150

Calculate the amount of net accounts receivable after the adjustment for bad debts

Dr Accounts receivable $ 16,850