I need some help. I got the answer below correct but i don't know if i got it correct for the right reason
The following information is relevant to one of the City of Mullins' General Fund's derived tax revenues:
Fiscal year-end June 30
Beginning receivables $450,000
Beginning deferred revenues 100,000
Beginning allowance for doubtful accounts 50,000
Receipts 1,250,000
Ending receivables 600,000
Receivables collected 6/30 – 8/30 125,000
Ending allowance for doubtful accounts 60,000
The City of Mullins considers derived tax receivables collected within 60 days after the close of the fiscal year to be “available.” Furthermore, the City wrote off $30,000 of receivables as uncollectible during the year.
What amount of revenues would be reported at the entity-wide level?
NINJA Explanation
Receipts current year $1,250,000
Add ending receivables 600,000
Less ending allowance for doubtful accounts (60,000)
1,790,000
Less beginning receivables (450,000)
Add beginning allowance for doubtful accounts 50,000
Current-year revenue $1,390,000
MY Explanation:
Accounts Receivable
B 450,000
A PLUG 1,400,000
S 1,250,000
E 600,000
Allowance
B 50,000
A PLUG 40,000
S 30,000
E 60,000
$1,400,000 are my sales
$10,000 is my change in Allowance (this is the part i am unsure of)
$1,390,000 is the amount of revenues reported.
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