(Learning Objectives 4, 5: Apply GAAP for receivables and uncollectiblereceivables) Suppose Easton, Inc., reported net receivables of $2,582 million and $2,260 millionat January 31, 2019, and 2018, respectively, after subtracting allowances of $72 million and $67million at these respective dates. Easton earned total revenue of $43,333 million (all on account)and recorded uncollectible-account expense of $13 million for the year ended January 31, 2019.Requirement1. Use this information to measure the following amounts for the year ended January 31, 2019:a. Write-offs of uncollectible receivables b. Collections from customers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
(Learning Objectives 4, 5: Apply GAAP for receivables and uncollectible
receivables) Suppose Easton, Inc., reported net receivables of $2,582 million and $2,260 million
at January 31, 2019, and 2018, respectively, after subtracting allowances of $72 million and $67
million at these respective dates. Easton earned total revenue of $43,333 million (all on account)
and recorded uncollectible-account expense of $13 million for the year ended January 31, 2019.
Requirement
1. Use this information to measure the following amounts for the year ended January 31, 2019:
a. Write-offs of uncollectible receivables b. Collections from customers
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