Analysis of Receivables Method Analysis of Receivables Method At the end of the

Question

Analysis of Receivables Method

Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $465,000; Allowance for Doubtful Accounts has a credit balance of $4,000; and sales for the year total $2,090,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $14,000. Determine the amount of the adjusting entry for uncollectible accounts. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense Determine the net realizable value of accounts receivable.

Explanation / Answer

a). The amount of the adjusting entry for uncollectible accounts=$14,000-$4,000=$10,000

b) Acccounts receivable $465,000-Dr

Allowances for doubtful avvounts $14,000 Cr

Bad debt expense $10,000 Dr

c) Net realizable value of accounts receivable=$465,000-$14,000=$451,000

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