Abundant Returns
This Company Sells Its Merchandise Only on Credit

question 129

Essay

Abundant Returns
This company sells its merchandise only on credit.The following data are available at December 31,2012.
$\begin{array}{ll} \text { Sales } &\$ 411,000 \\ \text {Sales returns and allowances } &12,000 \\ \text {Accounts receivable at January 1,2012 } &89,000 \\ \text {Allowance for doubtful accounts at January 1, 2012 } &4,100 \\ \text {Cash collections during 2012} &385,100 \\ \text {Accountswritten off as uncollected during 2012} &3,600\end{array}$
-Refer to Abundant Returns.Assume that the company estimates bad debts using the aging method.The aging schedule indicates that $11,500 of the end of the year Accounts Receivable will be uncollected.
A) What amount will the company recognize as bad debt expense for the year?
B) If the ending balance of Accounts Receivables is $\$ 65,200$ , what is the net realizable value of Accounts Receivable reported on December 31,2012 ?

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Definitions:

Units Sold

The total quantity of items sold within a specific period.

Marketing Channel

A pathway through which products and services flow from producers to consumers, involving various intermediaries like wholesalers, distributors, and retailers.

Marketing Executives

Professionals responsible for developing and overseeing marketing strategies to increase brand awareness and market share.

Marketing Channel

The path or route that products and services take from the producer to the end consumer, including all the intermediaries involved.