Vladulac Corporation Began 2018 with Accounts Receivable of $180,000 and an Allowance

question 23

Essay

Vladulac Corporation began 2018 with accounts receivable of $180,000 and an allowance for uncollectible accounts of $13,000 (credit balance). Bad debt expense for the year was $25,000 and the ending balance in the allowance for uncollectible accounts account was $16,000. The accounts receivable turnover ratio for 2018 was 10.0. NOTE: This ratio was calculated using the average of gross accounts receivable in the denominator (that is, [$180,000 + year-end accounts receivable] divided by 2).
The following additional information is also available:
$$\begin{array} { | l | l | } \hline \text { Inventory turnover ratio } & 8.0 \\\hline \text { Average inventory } & \$ 150,000 \\\hline \text { Gross profit ratio } & 40 \\\hline\end{array}$$
Required:
a. What was the amount of accounts receivable written off during the year?
b. What was the amount of cash collected from customers during the year? Assume that all sales are made on a credit basis and that there were no collections of previously written off receivables or sales returns.

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Definitions:

Savings Account

A bank account where money is kept for savings purposes and earns interest over time.

Stated Interest Rate

The annual interest rate declared on a bond or loan, not accounting for compounding or the effect of any fees.

Chi-square

A statistical test used to examine the differences between categorical variables in a contingency table.