Mosaic’s Company balance sheet at December 31, 2018, reportedthe following:
Accountsreceivable...........................................$2,500,000
Allowance for uncollectibleaccounts...................$66,600
The following are the transactions to be taken intoconsideration for 2019:
a. Total credit sales for 2019 were $3,600,000.
b. 2% of sales were estimated to be uncollectible.
c. The company received cash payments on account during 2019 for$1,000,000
d. Accounts receivable identified to be uncollectible totaled$94,000.
e. December 31, 2019, aging of receivables indicates that$75,000 of the receivables is uncollectible.
Requirements:
1. What was the net realizable value of the receivables as atDecember 31, 2018?
2. Prepare the journal entries for the company’s 2019transactions.
3. Prepare the Accounts receivable and the Allowance foruncollectible Accounts T-accounts based on the informationpresented above. (Note: The opening balances and the transactionsfrom the journal entries must be recorded in their respectiveaccounts)
4. What is the net realizable value of receivables as atDecember 31, 2019? (Show workings)
