outstanding receivables will be uncollectible, what will be tne U expense? You M
ID: 2577838 • Letter: O
Question
outstanding receivables will be uncollectible, what will be tne U expense? You MUST doubtful accounts after the year-end adjustment to record bad debt expenser You Ms show your work to get credit. Problem 6 (5 Points) At the close of its first year of operations, December 31, 2017, Ming Company had accounts receivable of $1,620,000, after deducting the related allowance for doubtful accounts. During 2017, the company had charges to bad debt expense of $270,000 and wrote off, as uncollectible, accounts receivable of $120,000. What should the company report on its balance sheet at December 31, 2017, as accounts receivable before the allowance for doubtful accounts? You MUST show your work to get credit.Explanation / Answer
Closing balance on Dec31, 2017 of Accounts receivables = $16,20,000
Journal for charging bad debt expenses:
Bad debt expense Dr. $270,000
Allowance for doubtful accounts Cr. $270,000
Journal for uncollectible accounts:
Allowance for doubtful accounts Dr. $120,000
Accounts receivables Cr. $120,000
Now, balance in Allowance for doubtful accounts = $(270,000-120,000) = $150,000
The company should report on balance sheet on Dec31,2017 before allowance for doubtful accounts = Closing balance of Accounts receivable + Balance in Allowance for doubtful accounts = $(16,20,000+150,000) = $17,70,000
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