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Collecting Cash

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In the first year of operations, 2008, RRS recognized 220,000 of service revenue on account. The ending accounts receivable balance was 45,000. RRS estimates that 3% of sales on account will not be collected. Assume there were no other transactions affecting accounts receivable.
A.) What amount of cash was collected in 2008?
B.) What amount of uncollectible accounts expense was recognized in 2008?

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Solution Summary

This solution explains how to calculate the amount of cash collected and the uncollectible account expense.

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A. Total sales on account is 220,000. If nothing is collected the accounts receivable would be ...

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