Y Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments: The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,what is the net accounts receivable on the year-end balance sheet?

Question

Y Company obtained the following balances from its computerized accounting information system at the end of the year before adjustments:  The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,what is the net accounts receivable on the year-end balance sheet?

Quizplus · Accepted Answer

The net accounts receivable can be calculated by subtracting the estimated uncollectible amount from the accounts receivable balance. 2% of net sales is estimated to be uncollectible, and the net sales are not given. Therefore, we cannot determine the gross accounts receivable. However, we are given the accounts receivable balance before adjustments, which is $26,000. If we subtract 2% of net sales, we get $25,300, which is the net accounts receivable after adjustments that should be reported on the balance sheet.

Y Company Obtained the Following Balances from Its Computerized Accounting