Answer:
What amount would the company report as its net accounts receivable on December 31, 2017?
Accounts Receivable $873,000
Prepare the journal entry to write off the accounts on January 2, 2018.
Allowance for Uncollectible Accounts $ 26,000
Accounts Receivable $ 26,000
Assuming no other transactions occurred between December 31, 2017, and January 3, 2018, what amount would the company report as its net accounts receivable on January 3, 2018?
The same amount reported on December 31, 2017, if the company doesn't report any movement with the credit debtor there is nothing to do.
Has net accounts receivable changed from December 31, 2017?
The net accounts are the same there is not change in the balance because the write-off it's just a reclassification between the accounts, so the balance keep the same as before.
Explanation:
Accounts Receivable $873,000
The company reports as net accounts receivable the total amount on Accounts Receivable minus the total amount on the Allowance for Uncollectible Accounts which represent the amount of credit that won't be possible to collect, the result it's the total value on net accounts receivable.
Allowance for Uncollectible Accounts $ 26,000
Accounts Receivable $ 26,000
As the company just recognized the accounts not collectible, at the moment of the write off it's just a reclasification between the accounts of Allowance for Uncollectible Accounts and Accounts Receivable.
At this moment it's a certainly that the accounts won't be collected, that is why the entry is recorded.
The amount which the company would report as its net accounts receivable on December 31, 2017 is $873,000
Based on the journal entry data as of January 2, 2018:
So if no other transaction was made between December 31, 2017, and January 3, 2018, they would use the same amount reported on December 31, 2017, and if the company doesn't report any movement with the credit debtor there is nothing to do.
Hence, the net accounts are the same on December 31, 2017 because the write-off is just a reclassification between the accounts, so the balance keep the same as before.
Accounts Receivable $873,000
Because the company reports as net accounts receivable,
The total amount on
Accounts Receivable - the total amount on the Allowance for Uncollectible Accounts
This represents the amount of credit that won't be possible to collect, the result it's the total value of net accounts receivable.
Because these accounts are not collectible, they will be written off.
And because these accounts won't be collected, the entry is recorded as $873,000 on the net accounts receivable on December 31, 2017
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