For each of the following scenarios, indicate the amount of the adjusting journa

Question

For each of the following scenarios, indicate the amount of the adjusting journal entry for Bad Debt expense to be recorded, the balance in Allowance for Doubtful Accounts after adjustment at December 31, and the net realizable value of Accounts Receivable at December 31.

a. Based on an analysis of Simmon's Company's $380,000 balance in Accounts Receivable at December 31, it was estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for Doubtful Accounts before adjustment.

Bad Debt Expense

Allowance for Doubtful Accounts at Dec. 31

Net Realizable Value of A/R at Dec. 31

Explanation / Answer

(a) Bad debts expenses    =    14,300 (b) Allowance for doubtful accounts = 15,500 (c) Net realizable value = 364,500 Adjusting entry for bad debts expenses: Bad debts expense A/c Dr.   14300 To Allowance for doubtful accounts   14300 *Calculation of bad debts expenses : uncollectible balance in accounts receivables - credit balance of allowance for doubtful account 15,500 - 1,200 14300 *Allowance for doubtful account = uncollectible balance in account receivable account 15,500 *Net Realizable Value : Balance in accounts receivables - uncollectible balance    380,000 - 15,500 364,500

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.