Question

Jennifer had net sales (all on account) in 2020 of $860000. At December 31, 2020, before adjusting entries, the balances in selected accounts were: accounts receivable $1060000 debit, and allowance for doubtful accounts $2320 debit. Jennifer estimates that 2% of its accounts receivable will prove to be uncollectible. What is the net amount expected to be collected of the receivables reported on the financial statements at December 31, 2020

Answer 1

Answer:

The amount to be collected of the receivables = $1,038,800

Explanation:

we are given that:

accounts receivable = $1,060,000

allowance for doubtful accounts = $2320

uncollectible account = 2%

Next, we will convert the account uncollectible to money from percentage:

Uncollectible account = 2% of account receivable

= 2/100 of 1060000

= 0.02 × 1060000 = $ 21,200

∴ Net amount to be collected =  amount receivable - amount uncollectible

Net amount to be collected = 1,060,000 - 21,200 = $1,038,800

Therefore the amount to be collected of the receivables = $1,038,800