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.

← Calculating risk premium on small company stocks Exploring the mysteries of the universe →

More Posts: