Question

At the close of its first year of operations, December 31, 2020, Vaughn Manufacturing had accounts receivable of $1631000, after deducting the related allowance for doubtful accounts. During 2020, the company had charges to bad debt expense of $283000 and wrote off, as uncollectible, accounts receivable of $111000. What should the company report on its balance sheet at December 31, 2020, as accounts receivable before the allowance for doubtful accounts?

Answer 1

$180300

Step-by-step explanation:

Gross accounts receivable (A/R) (before allowance for doubtful account)

= Beginning A/R + Charge to bad debt expense - Written-off as uncollectible

Given,

Beginning A/R = $1631000

Bad debt = $283000

Wrote off = $111000

Therefore, substitute the values in the formula will give us;

= $1631000 + $283000 - $111000

= $1914000 - $111000

= $180300