Transaction Analysis: Accounts Receivable
S. Claus Company ended the 2000 season with an accounts receivable balance of $375,000, less allowance for uncollectible accounts of $37,500. Use the accounting equation to reflect each of the following situations and calculate the
2001 season's ending balance in accounts receivable and the allowance account.
1. Revenues in 2001 were $4,500,000, half of which were collected in cash, with the balance on account.
2. Cash collections of accounts receivable in 2001 were $2,375,000.
3. Write-offs of delinquent accounts in 2001 were $2,000.(Most people are not willing to offend S. Claus!)
4. S. Claus wants its allowance account, at the end of 2001, to have the same proportionate relationship reflected at the end of 2000.