Net Accounts Receivable Calculation

Financial Calculations: Net Accounts Receivable Calculation

Overview

  • This section discusses the calculation of net accounts receivable based on the given balances from Jackson 35 as of December 31, 2021.

Given Balances

  • Accounts Receivable: $71,000
  • Accounts Payable: $7,500 (Note: Not needed for this calculation)
  • Service Revenue: $500,000 (Note: Not needed for this calculation)
  • Allowance for Uncollectible Accounts: $4,000
  • Cash: $27,000 (Note: Not needed for this calculation)
  • Discounts: $900 (Note: Not needed for this calculation)

Formula for Net Accounts Receivable

  • The net accounts receivable can be determined using the formula:
    Net Accounts Receivable=Accounts Receivable−Allowance for Uncollectible Accounts\text{Net Accounts Receivable} = \text{Accounts Receivable} - \text{Allowance for Uncollectible Accounts}

Calculation Steps

  1. Insert the given values into the formula:
    • Accounts Receivable = $71,000
    • Allowance for Uncollectible Accounts = $4,000
  2. Perform the calculation:
    Net Accounts Receivable = 71,000 − 4,000\text{Net Accounts Receivable} \ = \ 71,000 \ - \ 4,000
    Net Accounts Receivable = 67,000\text{Net Accounts Receivable} \ = \ 67,000

Result

  • The calculated Net Accounts Receivable for Jackson 35 on December 31, 2021, is:
    Net Accounts Receivable=67,000\text{Net Accounts Receivable} = 67,000

Conclusion

  • The net accounts receivable reflects the amount that the company expects to collect from its accounts receivable after accounting for potential uncollectible accounts, which is crucial for financial reporting and analysis.