Vladulac Corporation Began 2017 with Accounts Receivable of $180,000 and an Allowance

question 112

Essay

Vladulac Corporation began 2017 with accounts receivable of $180,000 and an allowance for uncollectible accounts of $13,000 (credit balance).Bad debt expense for the year was $25,000 and the ending balance in the allowance for uncollectible accounts account was $16,000.The accounts receivable turnover ratio for 2017 was 10.0.NOTE: This ratio was calculated using the average of gross accounts receivable in the denominator (that is,[$180,000 + year-end accounts receivable] divided by 2).
The following additional information is also available:
Required:
a.What was the amount of accounts receivable written off during the year?
b.What was the amount of cash collected from customers during the year? Assume that all sales are made on a credit basis and that there were no collections of previously written off receivables or sales returns.

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Definitions:

Debt Restructuring

The process by which terms of an existing debt are modified, often involving the reduction of the debt and/or extension of payment terms.

Common Stock

Represents equity ownership in a corporation, providing holders with voting rights and a share in the company's profits through dividends.

Note Payable

A written agreement to pay a certain sum of money, typically with interest, at a future date.

IFRS

A global framework for financial reporting, International Financial Reporting Standards are accounting standards established by the International Accounting Standards Board (IASB).