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 $730,000; Allowance for Doubtful Accounts has a credit balance of $6,500; and sales for the year total $3,290,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $24,700.

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.
$

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

Explanation / Answer

a. Amount of the adjusting entry for uncollectible accounts = $24,700 - $6,500 = $18,200

b.

c. Net realizable value = $730,000 - $24,700 = $705,300

Accounts Receivable $730,000 Allowance for Doubtful Accounts $24,700 Bad Debt Expense $18,200

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