assuming holt uses the allowance method to account for uncollectible accounts what a 650280

Determining account balances: allowance method of accounting for uncollectible accounts

During the first year of operation, 2010, Holt Appliance Co. recognized $300,000 of service revenue on account. At the end of 2010, the accounts receivable balance was $58,000. For this first year in business, the owner believes uncollectible accounts expense will be about 1 percent of sales on account.

Required

a. What amount of cash did Holt collect from accounts receivable during 2010?

b. Assuming Holt uses the allowance method to account for uncollectible accounts, what amount should Holt record as uncollectible accounts expense for 2010?

c. What is the net realizable value of receivables at the end of 2010?

d. Show the effects of the above transactions c on the financial statements by recording the appropriate amounts in a horizontal statements model like the one shown here. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA for not affected.