Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the wallace corporation started year four with $50

The Wallace Corporation started Year Four with $500,000 in its accounts receivable T-account and an...

50.1K

Verified Solution

Question

Accounting

The Wallace Corporation started Year Four with $500,000 in its accounts

receivable T-account and an allowance for doubtful accounts of $20,000

(credit balance). During that year, the company made additional sales of

$1.6 million while collecting cash of $1.3 million. In addition, $24,000 inaccounts were written off as uncollectible. Company officials for Wallace

estimated that 4 percent of ending receivables would eventually prove

to be uncollectible based on past history and current economic

conditions. The adjusting entry was prepared and preliminary financial

statements were created. These statements showed net income of

$220,000 and a total for all reported assets of $1.1 million. At the last

moment, on December 31, Year Four, company officials discovered

another receivable of $1,000 that needed to be written off because the

debtor went bankrupt and was liquidated. What should the company report as its net income for the year and as its total for al reported assets as the end of the year?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students