Question

Ace Co. prepared an aging of its accounts receivable at December 31, 2020 and determined that the net realizable value of the receivables was $300,000. Additional information is available as follows:information is available as follows:Allowance for uncollectible accounts at 1/1/12—credit balance $ 68,000Accounts written off as uncollectible during 2012 46,000Accounts receivable at 12/31/12 650,000Uncollectible accounts recovered during 2012 10,000For the year ended December 31, 2012, Ace's uncollectible accounts expense would bea. $50,000.b. $46,000.c. $32,000.d. $18,000.

Answer 1

d. $18,000.

Step-by-step explanation:

The computation of the uncollectible accounts expense is shown below;

But before that first we have to determine the credit balance in allowance for doubtful debts which is

= $650,000 - $600,000

= $50,000

Since all other data is given so we have to find out the actual credit balance in allowance for doubtful debts which is

= $68,000 - $46,000 + $10,000

= $32,000

So, the bad debt expense is

= $50,000 - $32,000

= $18,000

The net realizable value of the receivables is $600,000 instead of $300,000 as of $600,000, the options are provided