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In the First Year of Operation, Ralph's Repair Service Recognized

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Essay

In the first year of operation, Ralph's Repair Service recognized $480,000 of service revenue on account. The ending accounts receivable balance was $88,000. Ralph estimates that 2% of sales on account will not be collected. During Year 1, Ralph wrote off a $200 receivable that was determined to be uncollectible. Assume there were no other transactions affecting accounts receivable.
Required: a)What amount of cash was collected in Year 1?b)What amount of uncollectible accounts expense was recognized in Year 1?c)What is the net realizable value of accounts receivable that will be reported on the balance sheet as of December 31, Year 1?


Definitions:

Role Ambiguity

The uncertainty and lack of clarity about expectations, responsibilities, and the scope of one's job.

Uncertainty

The state of being uncertain or not being sure about the future or about what is the right thing to do.

Family-Run Businesses

Enterprises that are owned, managed, and operated by multiple members of the same family.

Generations

Groups of individuals, typically within a society, who are born and live around the same time, often sharing similar cultural experiences or characteristics.

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