Question

Chez Fred Bakery estimates the allowance for uncollectible accounts at 2% of the ending balance of accounts receivable. During 2021, Chez Fred's credit sales and collections were $110,000 and $134,000, respectively. What was the balance of accounts receivable on January 1, 2021, if $210 in accounts receivable were written off during 2021 and if the allowance account had a balance of $510 on December 31, 2021?

Answer 1

$49,710

Step-by-step explanation:

Sales during the year $110,000

Collections during the year ($134,000)

Bad Debts Written off ($210)

A/R Closing 510/2% ( $25,500)

A/R Opening $49,710

Through T-Account approach we can figure out the missing figure of opening account receivable.