Answer to Question #271229 in Economics for Lex

Question

The balance sheet of Starsky Company at December 31, 2019, includes the following.

Notes receivable                                            $36,000

Accounts receivable                                      182,100

Less: Allowance for doubtful accounts         17,300                        $200,800

Transactions in 2020 include the following.

1. Accounts receivable of $138,000 were collected including accounts of $60,000 on which 2% sales discounts were allowed.

2. $5,300 was received in payment of an account which was written off the books as worthless in 2019.

3. Customer accounts of $17,500 were written off during the year.

4. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.

Answer 1

Accounts receivable  $182,100-138,000+17,300-17,500=51,900$

Notes receivable  $36,000-5,300=30,800$

Less: Allowance for doubtful accounts  $20,000$

Total $62,700$