Question

At the end of 2017, Pharoah Company has accounts receivable of $924,000 and an allowance for doubtful accounts of $40,200. On January 16, 2018, Pharoah Company determined that its receivable from Ramirez Company of $6,870 will not be collected, and management authorized its write-off.

Prepare the journal entry for Pharoah Company to write off the Ramirez receivable. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
Jan. 16, 2018

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What is the net realizable value of Pharoah Company’s accounts receivable before the write-off of the Ramirez receivable?

Net realizable value $

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What is the net realizable value of Pharoah Company’s accounts receivable after the write-off of the Ramirez receivable?

Net realizable value $

Answer 1

Prepare the journal entry for Pharoah Company to write off the Ramirez receivable

Date	account titles and explanation	debit	credit
January 16, 2018	Allowance for doubtful accounts-Ramirez Company	6870
	Account receivable-Ramirez Company		670
	(To record amount write off)

net realizable value of Pharoah Company’s accounts receivable before the write-off of the Ramirez receivable?

Net realizable value of account receivable = (924000-40200) = 883800

net realizable value of Pharoah Company’s accounts receivable after the write-off of the Ramirez receivable

Net realizable value of account receivable= (924000-6870)-(40200-6870) = 883800