On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method of accounting for uncollectible accounts. In February of Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050.

Which of the following answers correctly states the effect of recording the collection of the reestablished receivable on April 4, Year 2?

Transcribed Image Text:

Α. Β. C. D. ABCD Assets ΝΑ 1,050 1,050 ΝΑ = |||||||| = = ΝΑ = Liab. ΝΑ = ΝΑ ΝΑ +++++ Equity ΝΑ 1,050 1,050 ΝΑ Rev. ΝΑ 1,050 ΝΑ ΝΑ Expenses = ΝΑ = ΝΑ (1,050 ΝΑ ) = = Net Inc. ΝΑ 1,050 1,050 ΝΑ Cash Flow ΝΑ 1,050 ΟΑ 1,050 ΟΑ 1,050 ΟΑ Α. Β. C. D. ABCD Assets ΝΑ 1,050 1,050 ΝΑ = |||||||| = = ΝΑ = Liab. ΝΑ = ΝΑ ΝΑ +++++ Equity ΝΑ 1,050 1,050 ΝΑ Rev. ΝΑ 1,050 ΝΑ ΝΑ Expenses = ΝΑ = ΝΑ (1,050 ΝΑ ) = = Net Inc. ΝΑ 1,050 1,050 ΝΑ Cash Flow ΝΑ 1,050 ΟΑ 1,050 ΟΑ 1,050 ΟΑ

Answer rating: 100% (QA)

Accounts receivable Dr 1050 Allowance for doubtful accounts Cr 1050 On collect... View the full answer