Bayside will collect $24,000 from its customer when the job is finished but the revenue is earned evenly over the six months. On March 31, before adjusting entries are made, Bayside's Accounts Receivable account had a debit balance of $4,000. After the March 31 monthly adjusting entry has been made, what will be the balance in Accounts Receivable?

Question

Scarlett Richard

Business

21 February, 05:40

Bayside will collect $24,000 from its customer when the job is finished but the revenue is earned evenly over the six months. On March 31, before adjusting entries are made, Bayside's Accounts Receivable account had a debit balance of $4,000. After the March 31 monthly adjusting entry has been made, what will be the balance in Accounts Receivable?

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Answers (1)

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Grant Blevins · Answer 1

The balance in the Accounts Receivable amounts to $8,000

Explanation:

The balance in the Accounts Receivable is computed as:

Accounts receivable balance = Collected amount * Month / Total months + Debit balance of Accounts Receivable

where

Collected amount is $24,000

Month is 1 as for the month of march

Total months will be 6 as it is for six months

Debit balance of accounts receivable is $4,000

Putting the values above:

Accounts receivable balance = $24,000 * 1 / 6 + $4,000

Accounts receivable balance = $4,000 + $4,000

Accounts receivable balance = $8,000