ACCT 101 Study Guide - Quiz Guide: Porton, Cash Flow, Investment
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At the start of 2011, the ledger of stivers company included the following accounts and balances: Cash collections on accounts receivable during 2011 amounted to ,000. Sales revenue during 2011 amounted to ,000, of which 75% was on credit, and it was estimated that 2% of the credit sales made in 2011 would ultimately become uncollectible. Before adjusting entries were made for 2011, (a) a. ,000 account was determined to be uncollectible and written-off by stivers and (b) bad debt expense was recorded for 2011. These adjustments are not reflected in the account balances above. After the above entries were posted to the ledger, the balances of the allowance for doubtful accounts (afda), bad debt expense (bd), and accounts receivable (ar) respectively are: Balance in ar = [200,000 400,000 +(800,000*75%) 10,000] = 390,000. On december 31, 2011, colonial corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries:
