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 $700,000; Allowance for Doubtful Accounts has a debit balance of $6,500; and sales for the year total $3,150,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $27,300.

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.
$

Explanation / Answer

a) Amount of adjusting entry = 27300+6500 = 33800

b) Adjusted balance

Account receivable = 700000

Allowance for doubtful accounts = 27300

Bad debt expense = 33800

c) Net realizable value = 700000-27300 = $672700

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