Pence Company Began 2013 with a Balance of $74,000 in Accounts

question 10

Essay

Pence Company began 2013 with a balance of $74,000 in accounts receivable and $4,300 in allowance for doubtful accounts. During the year, it provided $328,000 in services to customers on account and collected $290,000 in cash from its accounts receivable. Pence wrote off $3,250 of uncollectible accounts during 2013. At the end of the year, the company prepared an aging schedule and adjusted its accounts based on the estimate that $6,300 of receivables would not be collected.
Required:
a) Prepare the journal entries to record all the transactions related to accounts receivable, including the estimate of uncollectible accounts expense.
b) What was the net realizable value of Pence's accounts receivable at the end of 2013?

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Definitions:

Average Costs

The total cost of production divided by the number of goods produced, representing the cost per unit of output.

Diseconomies of Scale

The situation in which a firm's long-run average costs begin to increase as the firm expands output beyond a certain point.

Student Enrollment

The process by which students register for and commit to participating in educational programs or courses at an institution.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced.