At the end of 2012, Extreme Fitness has adjusted balances of $830,000 in Accounts Receivable. On January 2, 2013, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $10,000. Extreme Fitness uses the direct write-off method. Note that this means Extreme does not have an Allowance for Doubtful Accounts balance.
What amount would the company report as its receivable accounts on December 31, 2012?
Prepare the journal entry to write off the accounts on January 2, 2013.
Assuming no other transactions occurred between December 31, 2012, and January 3, 2013, what amount would the company report as its receivable accounts on January 3, 2013?
Solution
a.)
Accounts Receivable $ 830,000
Less: Allowance for Doubtful Accounts 0
Net Accounts Receivable $ 830,000
b.)
Accounts Receivable (-A) $10 ,000
Allowance for Doubtful Accounts (-xA, +A) 0
c.)
Accounts Receivable $ 820,000
Net Accounts Receivable $ 820,000
.
At the end of 2012- Extreme Fitness has adjusted balances of $830-000.docx
1. At the end of 2012, Extreme Fitness has adjusted balances of $830,000 in Accounts Receivable.
On January 2, 2013, the company learns that certain customer accounts are not collectible, so
management authorizes a write-off of these accounts totaling $10,000. Extreme Fitness uses the
direct write-off method. Note that this means Extreme does not have an Allowance for Doubtful
Accounts balance.
What amount would the company report as its receivable accounts on December 31, 2012?
Prepare the journal entry to write off the accounts on January 2, 2013.
Assuming no other transactions occurred between December 31, 2012, and January 3, 2013,
what amount would the company report as its receivable accounts on January 3, 2013?
a. What amount would the company report as its receivable accounts on December 31, 2012?
b. Prepare the journal entry to write off the accounts on January 2, 2013.
c-
Assuming no other transactions occurred between December 31, 2012, and January 3,
2013, what amount would the company report as its receivable accounts on January 3,
2013?
Solution
a.)
Accounts Receivable $ 830,000
Less: Allowance for Doubtful Accounts 0
Net Accounts Receivable $ 830,000
b.)
Accounts Receivable (-A) $10 ,000
2. Allowance for Doubtful Accounts (-xA, +A) 0
c.)
Accounts Receivable $ 820,000
Net Accounts Receivable $ 820,000
