At the end of 2012, Sorter Company has accounts receivable of $900,000 and an al
ID: 2445470 • Letter: A
Question
At the end of 2012, Sorter Company has accounts receivable of $900,000 and an allowance for doubtful accounts of $40,000. On January 16, 2013, Sorter Company determined that its receivable from Ordonez Company of $8,000 will not be collected, and management authorized its write-off.
Prepare the journal entry for Sorter Company to write off the Ordonez receivable
(b) What is the net realizable value of Sorter Company’s accounts receivable before the write-off of the Ordonez receivable?
Net realizable value
(c) What is the net realizable value of Sorter Company’s accounts receivable after the write-off of the Ordonez receivable?
Net realizable value
(c) What is the net realizable value of Sorter Company’s accounts receivable after the write-off of the Ordonez receivable?
Explanation / Answer
Net Realisable value Journal Entry Bad Debt Dr 8000 To allowance for doubtful debts 8000 Net Realisable Value 900000
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