BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $673,400 and Allowance for Doubtful Accounts has a balance of $11,900. Describe how the accounts receivable and the allowance for doubtful accounts are reported on the balance sheet.

To determine

Allowance method

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debts account.

To describe: The way in which accounts receivable and allowance for doubtful accounts are reported on the balance sheet.

Explanation

Accounts receivable would be reported under the asset section of the balance sheet. Allowance for doubtful accounts is deducted from the accounts receivable to show the net accounts receivable, since allowance for doubtful accounts is a contra asset account.

Two ways to report account receivable are as follows:

Accounts receivable, gross amount of $673,400 less the allowance for doubtful accounts of $11,900, thus showing a net accounts receivable of $661,500...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Why do economists make assumptions?

Principles of Microeconomics (MindTap Course List)

(Oligopoly Power) What are three sources of oligopolies?

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Describe the major components of a TQM program.

Foundations of Business (MindTap Course List)

What two things does GDP measure? How can it measure two things at once?

Brief Principles of Macroeconomics (MindTap Course List)

What is the function of a balance sheet?

College Accounting, Chapters 1-27

Explain the calculation of net sales and net purchases.

College Accounting (Book Only): A Career Approach

BOND RETURNS Last year Joan purchased a 51,000 face value corporate bond with an 11% annual coupon rate and a 1...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)