I need help figuring out two spaces that I got wrong. For the first one I put ba

Question

I need help figuring out two spaces that I got wrong.

For the first one I put bad debt expense and that was wrong.

Brief Exercise 8-3 Your answer is partially correct. Try again. At the end of 2013, Morley Co. has accounts receivable of $700,700 and an allowance for doubtful accounts of $24,570. On January 24, 2014, it is learned that the company's receivable from Spears Inc. is not collectible and therefore management authorizes a write-off of $5,360. (a) Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit 5,360 Accounts Receivable 5,360 (b) What is the cash realizable value of the accounts receivable before the write-off and after the write-off? Before Write-Off After Write-Off Cash realizable value 676,130 670,770

Explanation / Answer

Morley Co a Journal Entry to record write- off Account Titles and Explanation Debit Credit Allowance for doubtful accounts $                                 5,360 Accounts Receivable $                         5,360 (to write off bad debts) b Cash realizable value of the accounts receivable before the write-off and after the write off Before write-off After write-off Cash Realizable value (Accounts Receivable- Allowance for Doubtful accounts) $                           6,76,130 $                   6,81,490 ($700,700- $24,570) ($700,700- $19,210) Working Note: Balance in Allowance for Doubtful accounts (31-12-2013) $                               24,570 Credit Less: Write off of receivable from spears Inc. $                                 5,360 Debit Balance in Allowance for Doubtful accounts after write off $                               19,210 Credit

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