Ed Co. prepared an aging of its accounts receivable at December 31, 2004 and determined that the net realizable value of the receivables was $290,000. Additional information is available as follows:
Allowance for uncollectible accounts at 1/1/04?credit balance $ 29,000
Accounts written off as uncollectible during 2004 23,000
Accounts receivable at 12/31/04 320,000
Uncollectible accounts recovered during 2004 5,000
For the year ended December 31, 2004, Ed's uncollectible accounts expense would be
Estimated uncollectible expenses for 2004 should be (d) $19000 as explained below.
Account Receivable 31st Dec 2004 (Dr Bal) $320000
Add:: Amount previously written off Reversed $5000
Less: Amount recovered from the accounts previously written off ...
The solution examines uncollectible accounts.