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 $815,000; Allowance for Doubtful Accounts has a debit balance of $7,500; and sales for the year total $3,670,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $38,300. 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. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable.

Explanation / Answer

a Amount of the adjusting entry = 38300+7500 = $45800 b Accounts Receivable 815000 Allowance for Doubtful Accounts 38300 Bad Debt Expense 45800 c Net realizable value of accounts receivable = 815000-38300= $776700

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