Question

Tyler Company had a $150,000 beginning balance in Accounts Receivable

and a $6,000 credit balance in the Allowance for Doubtful Accounts. During
the year, credit sales were $600,000 and customers’ accounts collected were
$590,000. Also, $4,000 in worthless accounts was written off. What was the
net amount of receivables included in the current assets at the end of the
year, before any provision was made for doubtful accounts?

Explanation

, first ,we have to compute the ending balance of accounts receivable before
computing the  net amount of receivables and ending balance of allowance for
Doubtful Accounts which is shown below:
Ending balance of accounts receivable = Beginning balance + credit
sales - customers’ accounts collected - write off amount
= $150,000 + $600,000 - $590,000 - $4,000
= $156,000
And, the ending balance of allowance for Doubtful Accounts equal to
= Beginning balance - write off amount
= $6,000 - $4,000
= $2,000
Now the net amount of receivables equal to
= Ending balance of accounts receivable - ending balance of allowance
for Doubtful Accounts
= $156,000 - $2,000
= $154,000