Business, 27.02.2020 00:28 Quakersoatmeal9

Jake Company records bad debt expense using the net credit sales method and has estimated that 5.5% of its credit sales will prove to be uncollectible. During 2019, Jake Company reported net credit sales of $120,000 and collected $150,000 cash from its credit customers. The $150,000 includes a $6,000 recovery of an account receivable written off in the previous year. During 2019, Jake Company wrote-off as uncollectible accounts receivable of $4,000. Jake Company reported accounts receivable at January 1, 2019 of $88,000 and the allowance for doubtful accounts had an $8,000 credit balance at January 1, 2019. Calculate the net realizable value of Jake Company's accounts receivable at December 31, 2019.

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Answer from: asdf2342

net realizable value of Jack account receivables 42,600

Explanation:

we recognize bad debt as percent of credit sales:

120,000 x 5.5% = 6,600

account receivables balance:

88,000 + 120,000 credit sales - 150,000 collected + 6,000 recovery = 64,000

allowance:

8,800 + 6,000 recovery + 6,600 bad debt for the year = 21,400

net: 64,000 - 21,400 = 42,600

Answer from: markmeinberg

Net realizable value accounts receivables December 31 2019 - $ 43,400

Explanation:

Computation of Net realizable value of Accounts receivable balance

Accounts Receivable Movements

Opening balance: Accounts Receivable $ 88,000

Add: Credit sales $ 120,000

Add: Accounts receivable written off reinstated $ 6,000

Less: Cash collections $ ( 150,000)

Less; Receivables written off during the year $ ( 4,000)

Accounts receivable - December 31 2019 $ 60,000

Allowance for uncollectible accounts movements

opening balance $ 8,000

Add: Bad debts expense provided for the year

Credit sales * 5.5 % $ 120,000 $ 6,600

Add: Reinstatement of previous written off amount $ 6,000

Less: Receivable written off during $ ( 4,000)

Closing balance` $ 16,600

Net realizable value - Accounts Receivable $ 43,400

Answer from: Quest

Renting provides greater flexibility but can lead to higher costs in the long term.answer: b) or the second option.

Answer from: Quest

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

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Jake Company records bad debt expense using the net credit sales method and has estimated that 5.5%...

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