Wechsler Company uses the aging of accounts receivable method.The company performed an aging of accounts receivable on December 31 and gathered the following information:

What is the amount of Accounts Receivable,Net that will be reported on the balance sheet at December 31?
A) $505,000
B) $496,000
C) $467,000
D) $516,000

Question

Wechsler Company uses the aging of accounts receivable method.The company performed an aging of accounts receivable on December 31 and gathered the following information:

What is the amount of Accounts Receivable,Net that will be reported on the balance sheet at December 31?
A) $505,000 
B) $496,000 
C) $467,000 
D) $516,000

Quizplus · Accepted Answer

To calculate the Accounts Receivable, Net, we need to subtract the allowance for doubtful accounts from the total accounts receivable. The allowance for doubtful accounts is calculated by multiplying each age category by its respective estimated uncollectible percentage and then summing the products. 
So, the allowance for doubtful accounts is calculated as follows: 
($50,000 × 1%) + ($70,000 × 3%) + ($90,000 × 5%) + ($70,000 × 15%) = $14,000

Therefore, the Accounts Receivable, Net is calculated as follows: 
Total accounts receivable - allowance for doubtful accounts = $510,000 - $14,000 = $496,000

Hence, the correct choice is B.

Wechsler Company Uses the Aging of Accounts Receivable Method