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Financial Accounting Help? Write-Offs?
I have no idea how to do these problems! Looking in the textbook doesn't help at all, can someone please explain this?
At the end of 2013, Fitness Guru has adjusted balances of $800,000 in Accounts Receivable and $55,000 in Allowance for Doubtful Accounts. On January 2, 2014, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $10,000.
What amount would the company report as its net accounts receivable on December 31, 2012?
I meant to type December 31, 2013 in the question.
1 Answer
- ProfLv 76 years ago
There is no need to go back retroactively and adjust the books in 2013. It will not change the net amount of receivables. The net amount is $800,000 - $55,000 = $745,000.
After the write-off in January, the net amount is still $745,000: (790,000 - $45,000).
