Question

Homeplate sells softball equipment. On November 14, they shipped $4,000 worth of softball uniforms to Bonita Middle School, terms 2/10, n/30. On November 21, they received an order from Vista High School for $1,500 worth of custom printed bats to be produced in December. On November 30, Bonita Middle School returned $200 of defective merchandise. Homeplate has received no payments from either school as of month end. What amount will be recognized as net accounts receivable on the balance sheet as of November 30?

Answer 1

The net accounts receivable for Homeplate on the November 30 balance sheet is $3,800, after accounting for the return of defective goods from Bonita Middle School and excluding the unfulfilled order from Vista High School.

Step-by-step explanation:

Homeplate's net accounts receivable as of November 30 must account for the sale to Bonita Middle School, the return of defective merchandise, and exclude the order from Vista High School, as it was not shipped and thus not yet a receivable. Initially, Bonita Middle School purchased uniforms worth $4,000. They then returned $200 of defective merchandise. Therefore, the receivable from Bonita Middle School would be adjusted to $3,800 ($4,000 - $200).

The order from Vista High School does not factor into November's balance sheet because it is for the future production and has not been fulfilled yet. Thus, the net accounts receivable as of November 30 is $3,800.