At the end of the current year, Accounts Receivable has a balance of $2,500,000;

ID: 2380954 • Letter: A

Question

At the end of the current year, Accounts Receivable has a balance of $2,500,000; Allowance for Doubtful Accounts has a debit balance of $9,000; and net sales for the year total $32,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $76,000.

Determine

(a) the amount of the adjusting entry for uncollectible accounts.

(b) the adjusted balances of accounts receivable, allowance for doubtful accounts, and bad debt expense

Explanation / Answer

a) amount of the adjusting entry for uncollectible account = allowance of bad debt - dubtful debt

= 9000 - 0.01*0.25*32,000 = 8920

Accounts Receivable $2,500,000
Allowance for Doubtful Accounts $9000
Bad Debt Expense $80

c) net realized value = receivables- allowance

=2500,000 -9000 = 2491000

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At the end of the current year, Accounts Receivable has a balance of $2,500,000;

Question

Explanation / Answer

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