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Chez Fred Bakery estimates the allowance for uncollectible accounts at 2% of the ending balance of accounts receivable. During 2021, Chez Fred's credit sales and collections were $110,000 and $134,000, respectively. What was the balance of accounts receivable on January 1, 2021, if $210 in accounts receivable were written off during 2021 and if the allowance account had a balance of $510 on December 31, 2021?

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tanseershar

Answer:

$49,710

Explanation:

Sales during the year        $110,000

Collections during the year ($134,000)

Bad Debts Written off                    ($210)

A/R Closing 510/2%                 ( $25,500)

A/R Opening                               $49,710

Through T-Account approach we can figure out the missing figure of opening account receivable.    

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