Reference no: EM131794093
On December 31, 2014, Extreme Fitness has adjusted balances of $700,000 in Accounts Receivable. On January 2, 2015, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $12,000. Extreme Fitness uses the direct write-off method.
a. What amount would the company report as its receivable accounts on December 31, 2014?
b. Prepare the journal entry to write off the accounts on January 2, 2015. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
c-1. Assuming no other transactions occurred between December 31, 2014, and January 3, 2015, what amount would the company report as its receivable accounts on January 3, 2015?
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