ACCOUNTING 2101/6101 - TESTING YOUR KNOWLEDGE CHAPTER 7 3) The Clinton Corporati

Question

ACCOUNTING 2101/6101 - TESTING YOUR KNOWLEDGE CHAPTER 7 3) The Clinton Corporation prepares an aging of its accounts receivable at year-end and Page 2 reports the following: Assume all relevant accounts have normal balances.] Accounts receivable balance, 12/31 Allowance for uncollectible accounts (12/31, unadjusted balance) As per aging analysis, estimate of accounts expected 2,660,000 87,000 to be uncollectible 235,000 REQUIRED: (a) What amount should be reported as the net realizable value of accounts receivable on the year-end balance sheet? (b) Prepare the appropriate year-end adjusting entry for the bad debt expense. CONTINUE TO PAGE 3 FOR QUESTION #4.

Explanation / Answer

Solution:-

(a) 2,666,000 - 235,000 = 2,431,000 should be reported as net realizable value of accounts receivable on the year - end balance sheet.

(b)

Please Rate or comment if you have any doubt regarding this solution.

Date Account titles and explanation Debit Credit 12/31 Allowance for doubtfull debts (235,000 - 87,000) 148,000 Accounts receivable 148,000

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