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the accounts receivable balance for renue spa at december 31, year 1, was $61,000. also on that date, the balance in the allowance for doubtful accounts was $3,750. total retained earnings at the end of year 1 was $57,250. during year 2, $2,100 of accounts receivable were written off as uncollectible. in addition, renue unexpectedly collected $500 of receivables that had been written off in a previous accounting period. services provided on account during year 2 were $215,000, and cash collections from receivables were $218,000. uncollectible accounts expense was estimated to be 2 percent of the sales on account for the period.

Sagot :

anthougo

The year-end adjustments at December 31, Year 2 that Renue Spa should compute are as follows:

1. Balance for Allowance for Doubtful Accounts is = $4,360

2. Balance of Accounts Receivable is = $55,900

3. Net realizable value of Accounts Receivable at December 31, Year is = $51,540 ($55,900 - $4,360)

4. Uncollectible accounts expense for Year 2 is $2,210.

Data and Calculations:

Balances at December 31, Year 1:

Accounts Receivable = $61,000

Allowance for doubtful accounts balance = $3,750

Retained Earnings = $57,250

Analysis of Year 2 Transactions:

Allowance for Doubtful Accounts $2,100 Accounts Receivable $2,100

Accounts Receivable $500 Allowance for Doubtful Accounts $500

Cash $500 Accounts Receivable $500

Accounts Receivable $215,000 Service Revenue $215,000

Cash $218,000 Accounts Receivable $218,000

Bad Debts Expense $2,210 Allowance for Doubtful Accounts $2,210

Allowance for Doubtful Accounts ending balance = $4,360 ($218,000 x 2%)

T-Accounts:

Accounts Receivable

Account Titles                      Debit         Credit

Year 2 Beginning Balance $61,000

Allowance for doubtful                       $2,100

Allowance for doubtful            500

Cash                                                        500

Service Revenue              215,000

Cash                                                218,000

Year 2 Ending Balance                 $55,900

Allowance for Doubtful Accounts

Account Titles                      Debit         Credit

Year 2 Beginning Balance                  $3,750

Accounts Receivable         $2,100

Accounts Receivable                               500

Bad Debts Expense                             2,210

Year 2 Ending Balance    $4,360

Learn more: https://brainly.com/question/17350161

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