At the beginning of 2017, Delicious Drinks, Inc. has the following account balances: Accounts Receivable $40,000 (debit balance)
Allowance for Bad Debts $7,000 (credit balance)
Bad Debts Expense $0
During the year, credit sales amounted to $810,000. Cash collected on credit sales amounted to $770,000, and $17,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance of Accounts Receivable is ________.

Question

Quizplus · Accepted Answer

The ending balance of Accounts Receivable is calculated as the beginning balance plus credit sales minus cash collected and write-offs: $40,000 + $810,000 - $770,000 - $17,000 = $63,000.

At the Beginning of 2017, Delicious Drinks, Inc