At the Beginning of Year 3 Omega Company Had a $60,000

question 164

Multiple Choice

At the beginning of Year 3 Omega Company had a $60,000 balance in its accounts receivable account and a $3,000 balance in allowance for doubtful accounts. During Year 3, Omega experienced the following events.(1) Omega earned $200,000 of revenue on account(2) Collected $210,000 cash from accounts receivable(3) Wrote-off $2,000 of accounts receivable as uncollectible Omega estimates uncollectible accounts to be 4% of receivables. Based on this information, the December 31, Year 3 balance in the accounts receivable account is

• A)$50,000.
• B)$46,000.
• C)$48,000.
• D)$47,000.

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Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders.

Capital Loss Carryforward

The process of applying net capital losses to future tax years to reduce taxable income, subject to limitations.

Net Capital Loss

The result when the total capital losses from investments exceed the total capital gains in a tax year.

Net Capital Gain

The profit from the sale of an asset or investment, subtracted by any losses from sales in the same tax year.