Question

During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of ( $ 200,000 ), of which ( $ 100,000) was on credit. At the start of 2021, Accounts Receivable showed a ( $ 11,000 ) balance. During the year, Kelly's Camera Shop collected ( $ 80,000 ) from customers on their credit sales and wrote off ( $ 1,500 ) as uncollectible. Calculate the ending balance of Accounts Receivable for December 31, 2021.

Answer 1

The ending balance of Accounts Receivable for December 31, 2021, is $29,500.

Step-by-step explanation:

To calculate the ending balance of Accounts Receivable for December 31, 2021, we need to consider the starting balance, credit sales, collections, and write-offs. The starting balance of Accounts Receivable was $11,000. The credit sales were $100,000, and collections from customers were $80,000. This means that the net increase in Accounts Receivable was $100,000 - $80,000 = $20,000. However, we also need to subtract the amount written off as uncollectible, which is $1,500. Therefore, the ending balance of Accounts Receivable for December 31, 2021, is $11,000 + $20,000 - $1,500 = $29,500.