art IV More adjusting entries (10 Points) No Profits.Co m reported the following

Question

art IV More adjusting entries (10 Points) No Profits.Co m reported the following amounts on its balance sheet at the end of last year: Accounts receivable Less: Allowance for doubtful accounts Net Accounts Receivable $200,000 20,000 S180,000 The following events occurred during the current year: 1. Accounts receivable of $18,500 was written off as uncollectible. 2. Aging of accounts receivable at the end of the current ycar indicates a need for an $24,000 allowance to cover possible failure to collect accounts currently outstanding (i.e. the company estimates $24,000 of the $240,000 year-end balance in receivables will not be collected). REQUIRE a) What amounyshould be reported as NET accounts receivable at 12/31 on the current year balance sheet? s 55 24000-13soo 5SO0 b) What year-h AJE should be made based on he above information? Alowwne For uxollect y Accounts 5500 Account Raceiva 5500

Explanation / Answer

a Accounts receivable 240000 Less: Allowance for Doubtful accounts 24000 Net Accounts Receivable 216000 b Bad debts expense 22500 =24000-(20000-18500)      Allowance for Doubtful accounts 22500

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