During Its First Year of Operation, John's Repair Service Recognized

question 12

Essay

During its first year of operation, John's Repair Service recognized $220,000 of service revenue on account. The ending accounts receivable balance was $15,100. Jake estimates that 3% of sales on account will not be collected; no accounts receivable had been written off by year end. Assume there were no other transactions affecting accounts receivable. a)What amount of cash was collected during the year?
b)What amount of uncollectible accounts expense was recognized during the year?

---

Definitions:

Fur Coats

Luxurious outer garments made from the fur of animals, often considered a symbol of status and opulence.

Normal Goods

Goods whose demand increases when consumer income rises, and falls when consumer income decreases.

Consumer Incomes

The total amount of income earned by consumers, influencing their spending patterns and demand for goods and services.

Complementary Goods

Goods that are consumed together because the use of one enhances the use of the other, such as computers and software.