Reference no: EM133061162

Question - Mobile Technology Ltd. reported an unadjusted balance of accounts receivable of $1,290,000 at 31 December 20X3, along with a credit balance in the allowance for doubtful accounts of $84,300 and an allowance for sales discounts of $7,200. At year-end, the company determined that an allowance of $12,600 for sales discounts was needed. It also decided that $55,800 of accounts receivable were uncollectible and should be written off. Of the remaining receivables, it was determined that 35% were current, and of the remaining net current balance, an allowance for doubtful accounts of 2% of the net balance was needed. The remaining 65% of outstanding accounts receivable were past due and an allowance for doubtful accounts of 10% of the outstanding balance was needed.

Required - For each case above, show how net accounts receivable would be reported on the statement of financial position, and calculate bad debt expense for the year.