Renue Spa had the following balances as of December 31, Year 1: Accounts receivable was $87,000,...

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Renue Spa had the following balances as of December 31, Year 1: Accounts receivable was $87,000, allowance for doubtful accounts was $2,900 and total retained earnings at the end of Year 1 was $84,100. During Year 2 the company experienced the following events: 1. Accounts receivable in the amount of $2,100 were written off as uncollectible. 2. Collected $190 of receivables that had been written off in a previous accounting period. 3. Provided $223,000 worth of services on account during Year 2. 4. Cash collections from receivables were $225,046 during Year 2. 5. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. Balance of allowance for doubtful accounts at December 31, Year 2. 2. Balance of accounts receivable at December 31, Year 2. 3. Net realizable value of accounts receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2? Renue Spa had the following balances as of December 31, Year 1: Accounts receivable was $87,000, allowance for doubtful accounts was $2,900 and total retained earnings at the end of Year 1 was $84,100. During Year 2 the company experienced the following events: 1. Accounts receivable in the amount of $2,100 were written off as uncollectible. 2. Collected $190 of receivables that had been written off in a previous accounting period. 3. Provided $223,000 worth of services on account during Year 2. 4. Cash collections from receivables were $225,046 during Year 2. 5. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required a. Organize the information in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. Balance of allowance for doubtful accounts at December 31, Year 2. 2. Balance of accounts receivable at December 31, Year 2. 3. Net realizable value of accounts receivable at December 31, Year 2. c. What amount of uncollectible accounts expense will Renue Spa record for Year 2?

Answer rating: 100% (QA)

Lets organize the information using the accounting equation Assets Liabilities Equity 1 Assets Begin... View the full answer