On January 1, 2014, the Balances in the Accounts Receivable

Essay

On January 1, 2014, the balances in the Accounts receivable account of Hunter River Inc was
$220,000, and their Allowance for uncollectible accounts, $20,000.During the year Hunter made sales of
$1,400,00,0 of which 80% were on credit; historically, about 2% of what they sell on credit they don't collect.They gave up trying to collect $25,000 worth of accounts during the year, but did successfully collect
$1,100,000.
Required:
A) What are the balances in Hunter's Accounts receivable and Allowance for uncollectibles account at
December 31, 2014? Assume they use the percentage-of-sales method to determine bad debt expense.
B) What was their average collection period for 2014? If their Accounts receivable turnover ratio in 2013 was
5.0, have their collection efforts improved? They normally calculate their ratios using net accounts receivable, because they do not separately disclose their allowance for uncollectibles.