Problem #7 (4 %) A/R allowance method Please use the following information: At y

Question

Problem #7 (4 %) A/R allowance method Please use the following information: At year-end (but before adjusting entries), Glenn Co has an accounts receivable balance of $200,000 (debit) and an Allowance for Doubtful Accounts (ADA) balance of S12,000 (debit). During the year, Glenn Co. had $2,000,000 in Sales of which 95% were on credit. Additionally, during the year Glenn recovered S5.000 in previously written-off receivables. If the company uses the Percent of Receivables method and estimates 8% of accounts receivable will go "bad," calculate Bad Debt Expense reported for the year A. the company uses the Percent of Receivables method and estimates 8% of accounts receivable will go "bad," calculate the Net Realizable Value (NRV) of Accounts Receivable. B. If

Explanation / Answer

A Bad debts expense = (200000*8%)+12000 = $28000 B Net realizable value = 200000-160000 = $184000

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