REI Co-Op Inc. has the following unadjusted year end trial balance information available for 2022. 48 49 Credit Sales 50 Ending accounts receivable balance 51 Ending allowance for credit losses balance 52 Estimated uncollectibles 52 REI Co-Op 4,800,000 700,000 150,000 If REI Co-Op. uses the sales revenue approach for estimating the allowance for credit losses. What is the new ending allowance for credit loss balance after the proper adjustments to the accounts are recorded: Please round to the nearest whole number.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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