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On December 31,Year 1,the West Corporation Estimated That $6,000 of Its

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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.

Premises:
The February 1 write-off decreased Year 2 net income.
The February 1 write-off had no effect on West's Year 2 total assets.
The net realizable value of accounts receivable (after the appropriate adjustment at the end of Year 1.was $144,000.
The adjustment at the end of Year 2 had no effect on West's total assets.
The write-off of the account on February 1 Year 2 did not affect the net realizable value of West's accounts receivable.
Responses:
False
True

Correct Answer:

The February 1 write-off decreased Year 2 net income.
The February 1 write-off had no effect on West's Year 2 total assets.
The net realizable value of accounts receivable (after the appropriate adjustment at the end of Year 1.was $144,000.
The adjustment at the end of Year 2 had no effect on West's total assets.
The write-off of the account on February 1 Year 2 did not affect the net realizable value of West's accounts receivable.
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