John Den Bear Company had a $450,000 beginning balance in Accounts Receivable and a $18,000 credit balance in the Allowance for Doubtful Accounts. During the year, credit sales were $1,800,000 and customers' accounts collected were $1,770,000. Also, $12,000 in worthless accounts were written off. What was the net amount of receivables included in the current assets at the end of the year, before any provision was made for doubtful accounts

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Business

Demarcus Woodward

23 July, 10:08

John Den Bear Company had a $450,000 beginning balance in Accounts Receivable and a $18,000 credit balance in the Allowance for Doubtful Accounts. During the year, credit sales were $1,800,000 and customers' accounts collected were $1,770,000. Also, $12,000 in worthless accounts were written off. What was the net amount of receivables included in the current assets at the end of the year, before any provision was made for doubtful accounts

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Ryland Cummings · Answer 1

The net amount of receivables included in the current assets at the end of the year is $462,000

Explanation:

Beginning Balance of Accounts Receivable = $450,000

Add: Credit sales for the period = $1,800,000

Less: Cash collected = $1,770,000

Less: Amounts Written Off = $12,000

Ending Balance of Accounts Receivable = $468,000

Beginning Balance of Allowance Account = $18,000

Less: Amounts Written off = $12,000

Ending Balance = $6,000

Net amount receivable included in current assets

Accounts receivable = $468,000

Less: Allowance account = $6,000

Net Receivables = $462,000