The carrying amount of Accounts Receivable is $17,500 before the write off of a $2,500 account. Assuming the allowance method is used,” what is the carrying amount of the Accounts Receivable after the write off?
When the allowance method is used, following adjustment entry will be made for write off:
Date | General Journal | Debit | Credit |
a | Allowance for doubtful accounts | $2500 | |
Accounts receivable | $2500 | ||
(For writing off of uncollectibles) |
After the above adjustment entry is made, Accounts receivable balance will be reduced by $2500. So, carrying amount of accounts receivable after write off will be:
Carrying amount after write off = $17500 - $2500 = $15000
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