v2.cengagenow.com Analysis of Receivables Method At the end of the current year,

Question

v2.cengagenow.com Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $800,000; Allowance for Doubtful Accounts has a debit balance of $7,000; and sales for the year total $3,600,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $24,500 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) Adjusting amount for uncollectible accounts 24,500+7000 31500 Answer b) Account receivable 800,000 Allowance for Doubtful accounts 24,500 Bad debts expense 31,500 c) Net realizable value Accounts receivable 800,000 less:Allowance for doubtful accounts -24,500 Net realizable value 775,500 answer

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