How to Calculate the Net Amount Expected to be Collected of Teal Company's Accounts Receivable?
What is the net amount expected to be collected of Teal Company’s accounts receivable after the write-off of the Ramirez receivable?
After the write-off of the Ramirez receivable, what is the net amount expected to be collected of Teal Company's accounts receivable?
Net Amount Expected to be Collected
The net amount expected to be collected of Teal Company's accounts receivable after the write-off of the Ramirez receivable is $666,960.
Calculating the net amount expected to be collected involves subtracting the amount of the write-off from the total accounts receivable of the company. In this case, Teal Company had accounts receivable of $672,000 and an allowance for doubtful accounts of $33,600.
After determining that the receivable from Ramirez Company of $5,040 will not be collected and authorizing its write-off on January 16, 2021, the net amount expected to be collected can be calculated.
Formula for Net Amount Expected to be Collected
To calculate the net amount expected to be collected after the write-off of the Ramirez receivable:
- Net amount expected to be collected = Total accounts receivable - Ramirez receivable
Substitute the values into the formula:
- Total accounts receivable = $672,000
- Ramirez receivable = $5,040
Calculate the net amount expected to be collected:
- Net amount expected to be collected = $672,000 - $5,040
- Net amount expected to be collected = $666,960
Therefore, the net amount expected to be collected of Teal Company's accounts receivable after the write-off of the Ramirez receivable is $666,960.