At the end of the current year, Accounts Receivable has a balance of $955,110; A

Question

At the end of the current year, Accounts Receivable has a balance of $955,110; Allowance for Doubtful Accounts has a credit balance of $7,806; and sales for the year total $3,886,000. Bad debt expense is estimated at 1/2 of 1% of net sales.

a. Determine the amount of the adjusting entry for bad debt expense.
$

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.

Adjusted Balance Accounts Receivable $ Allowance for Doubtful Accounts Bad Debt Expense

Explanation / Answer

a)

b)

c)

Net sales $ 3,886,000 Estimated % of net credit sales 0.50% Baddebt expenses for the period ($3,886,000*0.50%) $        19,430

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