Question

At the beginning of January of the current year, Thomas Law Center's ledger reflected a normal balance of $55,000 for accounts receivable. During January, the company collected $17,800 from customers on account and provided additional services to customers on account totaling $14,000. Additionally, during January one customer paid Thomas $6,500 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

Answer 1

The accounts receivable balance should be $44,700 which is calculated by starting with the current balance of $52,000, subtracting the $14,800 in collections (which lowers the balance), adding the $12,500 of additional debt (which raises the balance), then finally subtracting $5,000 for the money collected on a future debt.