Question

g at the close of its first year of operations, december 31, 2020, delaware company reported net realizable value of accounts receivable of $1,620,000. during 2020,the company had charges to bad debt expense of $270,000 and wrote off, as uncollectible, accounts receivable of $120,000. what should the company report on its balance sheet at december 31, 2020, as accounts receivable before the allowance for doubtful accounts

Answer 1

$1,770,000

Step-by-step explanation:

Given the above information, the computation of accounts receivable before the allowance is shown below;

= Beginning account receivable balance + Bad debt expense - Uncollectible accounts receivables

= $1,620,000 + $270,000 - $120,000

= $1,770,000

The bad debt is an expense hence will be added whereas the account receivable which is yet to be collected should be deducted the computation part.