Reference no: EM133166524

Question - The Grouper Pub provides catering services to local businesses. The following information was available for The Grouper Pub for the years ended December 31, 2019 and 2020.

Grouper management is preparing for a meeting with its bank concerning renewal of a loan and has collected the following information related to the above balances.

1. The cash reported at December 31, 2020, reflects the following items: petty cash $1,580 and postage stamps $110. The other current assets balance at December 31, 2020, includes the checking account balance of $4,220.

2. On November 30, 2020, Grouper agreed to accept a 6-month, $4,960 note bearing 12% interest, payable at maturity, from a major client in settlement of a $4,960 bill. The above balances do not reflect this transaction.

3. Grouper factored some accounts receivable at the end of 2020. It transferred accounts totaling $10,000 to Final Factor, Inc. with recourse. Final Factor will receive the collections from Grouper's customers and will retain 2% of the balances. Final Factor assesses Grouper a finance charge of 3% on this transfer. The fair value of the recourse liability is $360. However, management has determined that the amount due from the factor and the fair value of the resource obligation have not been recorded, and neither are included in the balances above.

4. Grouper charged off uncollectible accounts with balances of $1,480. On the basis of the latest available information, the 2020 provision for bad debts is estimated to be 2.5% of accounts receivable.

Required - Based on the above transactions, determine the balance for (1) Accounts Receivable and (2) Allowance for Doubtful Accounts at December 31, 2020.