Reference no: EM131976891
Problem
Simpleton Company's balance sheet at December 31, 2015, reported the following:
Accounts receivable...........................................$700,000
Allowance for uncollectible accounts...................$23,331
The following are the transactions to be taken into consideration for 2016:
Total credit sales for 2016 were $1,000,000.
3% of sales were estimated to be uncollectible.
Simpleton received cash payments on account during 2016 for $640,000
Accounts receivable identified to be uncollectible totaled $36,000.
December 31, 2016, aging of receivables indicates that $42,200 of the receivables are uncollectible.
Requirements:
1. What was the net realizable value of the receivables as at December 31,2015. (show all workings)
2. Prepare the journal entries for the company's 2016 transactions.
3. Prepare the Accounts receivable and the Allowance for uncollectible accounts, T-accounts based on the information presented above.
4. What is the net realizable value of receivables as at December 31, 2016? (show all workings)
5. How much is the uncollectible account expense for 2016?
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