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 $510,000; Allowance for Doubtful Accounts has a credit balance of $4,500; and sales for the year total $2,300,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $20,300.

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

Answer a Journal Entry for enhancing the balance of Allowance for Doubtful Accounts to $20300 Particulars Debit Credit Bad Debt expense 15800 Allowance for Doubtful Accounts 15800 (provision estimated at the year end based on aging method) Answer b Adjusted balances Particulars In $ Accounts Receivable 510000 Allowance for Doubtful Accounts 20300 Bad debt expense 15800 Answer c Net realisable value of Accounts Receivable Particulars In $ Accounts Receivable 510000 Less : Allowance for Doubtful Accounts 20300 Net realisable value of Accounts Receivable 489700

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