On December 31, Year 1, the West Corporation estimated that $6,000 of its receivables might not...
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On December 31, Year 1, the West Corporation estimated that $6,000 of its receivables might not be collected. At the end of Year 1, the unadjusted balances of Accounts Receivable and Allowance for Doubtful Accounts were $150,000 and zero. On February 1, Year 2, West wrote-off of a delinquent account from one of its customers. West Corp. uses the allowance method. Indicate whether each of the following statements is true or false. a) The net realizable value of accounts receivable (after the appropriate adjustment at the end of Year 1) was $144,000. b) The write-off of the account on February 1 Year 2 did not affect the net realizable value of West's accounts receivable. c) The adjustment at the end of Year 2 had no effect on West's total assets. d) The February 1 write-off had no effect on West's Year 2 total assets. e) The February 1 write-off decreased Year 2 net income. On December 31, Year 1, the West Corporation estimated that $6,000 of its receivables might not be collected. At the end of Year 1, the unadjusted balances of Accounts Receivable and Allowance for Doubtful Accounts were $150,000 and zero. On February 1, Year 2, West wrote-off of a delinquent account from one of its customers. West Corp. uses the allowance method. Indicate whether each of the following statements is true or false. a) The net realizable value of accounts receivable (after the appropriate adjustment at the end of Year 1) was $144,000. b) The write-off of the account on February 1 Year 2 did not affect the net realizable value of West's accounts receivable. c) The adjustment at the end of Year 2 had no effect on West's total assets. d) The February 1 write-off had no effect on West's Year 2 total assets. e) The February 1 write-off decreased Year 2 net income.
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Answer rating: 100% (QA)
Solution a TRUE Net realizable value 1500006000 144000 b TRUE The write off decreases both accoun... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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