Question

At the end of the current year, Accounts Receivable has a balance of $948,990 Allowance for...

At the end of the current year, Accounts Receivable has a balance of $948,990 Allowance for Doubtful Accounts has a credit balance of $7,026 and net sales for the year total $2,006,000. Bad debt expense is estimated at 1/2 of 1% of net sales.

a. Determine the amount of the adjusting entry for bad debt expense.
$_________

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

Adjusted Balance
Accounts Receivable $______________
Allowance for Doubtful Accounts _______________
Bad Debt Expense _______________

c. Determine the net realizable value of accounts receivable.
$__________

Homework Answers

Answer #1

a)

Net sales $ 2,006,000
Estimated baddebt % of net sales 0.50%
Baddebt expense ($2,006,000*0.50%) $        10,030

b)

Accounts receivable $ 948,990
Allowance for doubtful account ($7,026+$10,030) $    17,056
Baddebt expense $    10,030

c)

Accounts receivable $ 948,990
Less: Allowance for doubtful account ($7,026+$10,030) $    17,056
net realizable value of accounts receivable $ 931,934

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