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In the First Year of Operations,2016,Ralph's Repair Service Recognized $480,000

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Essay

In the first year of operations,2016,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 the year,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 2016?
b)What amount of uncollectible accounts expense was recognized in 2016?
c)What will be Ralph's net realizable value of receivables on the December 31,2016 balance sheet?


Definitions:

Corporate Criminal Liability

The legal principle that a corporation, as an entity, can be held accountable for committing criminal acts.

Strict Liability Rule

A regulation imposing absolute responsibility on certain persons or entities for damages or losses, regardless of fault or intention.

Squeeze-Out

A strategy used by majority shareholders to pressure minority shareholders into selling their shares, often at unfavorable terms.

Minority Shareholder

An investor who owns less than 50% of a company's shares, typically having limited influence over corporate decisions.

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