Analysis of Receivables Method At the end of the current year, Accounts Receivab

Question

Analysis of Receivables Method

At the end of the current year, Accounts Receivable has a balance of $925,000; Allowance for Doubtful Accounts has a credit balance of $8,500; and sales for the year total $4,160,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $44,200.

a. Determine the amount of the adjusting entry for uncollectible accounts.
$

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

c. Determine the net realizable value of accounts receivable.
$

Explanation / Answer

a. Determine the amount of the adjusting entry for uncollectible accounts= $44200 - $8500
=$35,700

Entry : Bad Debts Expense --- Dr. $35,700

   Allowance for Doubtful Accounts --- Cr. $35,700

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense:

ACCOUNTS RECEIVABLE : $925,000

ALLOWANCE FOR DOUBTFUL ACCOUNTS : $44200

BAD DEBT EXPENSE : $35700

c. Determine the net realizable value of accounts receivable = $925,000 - $44200

   = $880,800

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.