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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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  1. 23 July, 13:18
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    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
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