At the end of 2011, Tatham Co. has accounts receivable of $705,100 and an allowa

Question

At the end of 2011, Tatham Co. has accounts receivable of $705,100 and an allowance for doubtful accounts of $26,740. On January 24, 2012, it is learned that the company's receivable from Nardin Inc. is not collectible and therefore management authorizes a write-off of $4,690. Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) What is the cash realizable value of the accounts receivable before the write-off and after the write-off? At the end of 2011, Tatham Co. has accounts receivable of $737,400 and an allowance for doubtful accounts of $26,320. On January 24, 2012, it is learned that the company's receivable from Nardin Inc. is not collectible and therefore management authorizes a writeoff of $4,840. 2. On March 4, 2012, Tatham Co. receives payment of S4,840 in full from Nardin Inc. Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Lynch Co. uses the percentage of receivables basis to record bad debts expense and concludes that 3% of accounts receivable will become uncollectible. Accounts receivable are $592,700 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,900. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Prepare the adjusting journal entry to record bad debts expense for the year. If the allowance for doubtful accounts had a debit balance of $890 instead of a credit balance of S2,900, prepare the adjusting journal entry for bad debts expense.

Explanation / Answer

EXERCISE 8-3:-

a)DEBIT ALLOWANCE FOR DOUBTFUL ACCOUNTS = 4690

CRDEIT ACCOUNTS RECIEIVEBLE = 4690

b)CASH REAZIBLE VALUE BEFORE WRITE OFF:-

ACCOUNTS RECIEVABLE = 705100

LESS:- ALLOWANCE FOR DOUBTFUL ACCOUNTS = (26740)

NET CASH REAZIBLE VALUE = 678360

CASH REAZIBLE VALUE AFTER WRITE

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