Question 1 At the end of 2016, Oriole Company has accounts receivable of $739,50

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Question 1 At the end of 2016, Oriole Company has accounts receivable of $739,500 and an allowance for doubtful accounts of $23,560. On January 24, 2017, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,031 (a) Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) What is the cash realizable value of the accounts receivable before the write-off and after the write-off? Before Write-Off After Write-Off Cash realizable value $ SHOW LIST OF ACCOUNTS LINK TO TEXT INTERACTIVE TUTORIAL

Explanation / Answer

Oriole Company Account Title & Explanation Debit Credit Allowance for doubtful accounts $      4,031.00     To Accounts Receivable $ 4,031.00 (Being write off amount receivable from Maddona is not collectible) Cash Realizable Value Befor Write off=(Accounts Receivable-Allowance for doubtful accounts)=($739500-$23560) $ 715,940.00 After Write off=(Accounts Receivable-Write off)-(Allowance for doubtful accounts-Write off)=($739500-$4031)-($23560-$4031) $ 715,940.00

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