Larry\'s License begin 2016 with Accounts Receivable Balance of $75,000.00 and A

Question

Larry's License begin 2016 with Accounts Receivable Balance of $75,000.00 and Allowance for Uncollectible Accounts $1,500.00. During the year Sales on Account were $350,000.00. Cash Collections totaled $295,000.00. A specific customers' account for $1,000.00 was written off during the year. At 12/31/2016, Larry determines that 12% of ending Accounts Receivable will not be paid due to the bad economy. Answer the following questions:

a. Record the Journal Entries for the year for Sales, Collections and Write-offs

b. What is the Journal Entry to record Estimated Bad Debt expense?

c. What is the ending balance in the Allowance for Uncollectible Accounts?

d. What is the Realizable value of Accounts receivable at 12/31/16?

Please help answering these questions.

Explanation / Answer

c)

The ending balance in the Allowance for Uncollectible Accounts = $15480

d)

  The Realizable value of Accounts receivable at 12/31/16 = $129000 - $15480 = $113520

a) Account Title & Explanations Debit($) Credit ($) Accounts receivable 350000 Sales 350000 (sales on account recorded) Cash 295000 Accounts receivable 295000 (collection of cash from customers) Allowance for Uncollectible Accounts 1000 Accounts receivable 1000 (Accounts receivable written off) b) Bad debt expense 15480 Allownce for Uncollectible Account 15480 (bad debt expense recorded)

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