Chico Company Began 2016 with Balances in Accounts Receivable and Allowance

question 115

Essay

Chico Company began 2016 with balances in accounts receivable and allowance for doubtful accounts of $44,300 and $1,675,respectively.The company reported credit sales of $490,250 during the year,and wrote off $1,400 of uncollectible accounts.Chico Company prepared the following aging schedule on December 31,2016:
Required: a)Prepare general journal entries to record the 2016 credit sales,collection of accounts receivable,write-off of uncollectible accounts,and estimate of uncollectible accounts.
b)What is Chico Company's net realizable value of receivables after all of the above entries have been made?

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Definitions:

Par Value

Par value is the face value of a bond or the stock value stated in the corporate charter, sometimes used in reference to the nominal value of securities.

Stock Split

A process initiated by a corporation to split its current stock into several shares in order to increase the shares' liquidity.

Market Price

The current price at which an asset or service can be bought or sold in the financial markets.

Dividend Per Share

The total dividends declared by a company divided by the number of outstanding shares.