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The following is a portion of the current assets section of the balance sheets of Avanti's, Inc., at December 31, 2017 and 2016: 12/31/17 12/31/16 Accounts receivable, less allowance for bad debts

The following is a portion of the current assets section of the balance sheets of Avanti's, Inc., at December 31, 2017 and 2016:
12/31/17 12/31/16
Accounts receivable, less allowance for bad debts of $9,398 and $15,819, respectively $177,800 $227,011
Required:
a. If $11,263 of accounts receivable were written off during 2017, what was the amount of bad debts expense recognized for the year? (Hint: Use a T-account model of the Allowance account, plug in the three amounts that you know, and solve for the unknown.)
 
b. The December 31, 2017, Allowance account balance includes $3,002 for a past due account that is not likely to be collected. This account has not been written off.
(1) If it had been written off, will there be any effect of the write-off on the working capital at December 31, 2017?
Yes
No
(2) If it had been written off, will there be any effect of the write-off on Net income and ROI for the year ended December 31, 2017?
Yes
No
c. The level of Avanti's sales in 2017 were probably lower as compared to 2016.
True
False
ReferenceseBook & Resources
WorksheetDifficulty: 2 MediumLearning Objective: 05-05 Discuss how accounts receivable are reported on the balance sheet, including the valuation allowances for estimated uncollectible accounts and estimated cash discounts.
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Jul 24 2021 View more View Less

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