Essay
In the first year of operations, Ralph's Repair Service recognized $480,000 of service revenue earned on account. The ending accounts receivable balance was $88,000. Ralph estimates that 2% of sales on account will not be collected. During the year, Ralph wrote off a $200 receivable that was determined to be uncollectible. Assume there were no other transactions affecting accounts receivable.
Required:What amount of cash was collected in Year 1?What amount of uncollectible accounts expense was recognized in Year 1?What will be Ralph's net realizable value of receivables on the December 31, Year 1 balance sheet?
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$391,800 cash collected$9,600 of uncolle...View Answer
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