Reference no: EM132794663
SI Company has the following data relating to accounts receivable for the year ended December 31, 2019:
Accounts receivable, January 1 425,000
Allowance for bad debts debit balance, January 1 20,000
Sales during the year 60% on account, terms: 10/10,5/15, n/30 and 40% cash sales 4,000,000
Cash received from customers during the year excluding cash sales 2,000,000
Accounts written off during the year 15,000
Sales returns and allowances 50,000
- An analysis of cash received from customers during the year revealed that 13.5% was received from customers availing the 10-day discount period, 23.75% was received from customers availing the 15-day discount period, 20,000 represented recovery of accounts written-off, and the balance was received from customers paying beyond the discount period.
- Si company's year- end balance of allowance for bad debts was estimated to be 10% of the outstanding accounts receivable as at December 31,2019 based on the aging of accounts.
REQUIRED:
Problem 1: What is the accounts receivable balance at December 31, 2019?
Problem 2: How much is the required balance of allowance for bad debts at December 31, 2019?
Problem 4: How much is the bad debts expense for the year ended December 31, 2019?
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