Data Management, Inc., provided the following information at December 31, year 1. Marketable Securities The company invested

Question:

Data Management, Inc., provided the following information at December 31, year 1.

Marketable Securities
The company invested $75,000 in a portfolio of marketable securities on December 9, year 1. The portfolio's market value on December 31, year 1, had decreased in value to $68,000.
Notes Receivable
On October 1, year 1, Data Management sold 50 laptop computers to the Mifflinburg School District for $74,500. The school district paid $2,500 at the point of sale and issued a one-year, $72,000, 6 percent note for the remaining balance. The note, plus accrued interest, is due in full on September 30, year 2. Data Management adjusts for accrued interest revenue monthly.
Accounts Receivable
Data Management uses a balance sheet approach to account for uncollectible accounts expense. Outstanding accounts receivable on December 31, year 1, total $900,000. After aging these accounts, the company estimates that their net realizable value is $860,000. Prior to making any adjustment to record uncollectible accounts expense, Data Management's Allowance for Doubtful Accounts has a debit balance of $9,000.
Instructions
a. Prepare the journal entry necessary to update the company's accounts immediately after performing its bank reconciliation on December 31, year 1.
b. Prepare the journal entry necessary to adjust the company's marketable securities to market value at December 31, year 1.
c. Prepare the journal entry necessary to accrue interest revenue in December, year 1.
d. Prepare the journal entry necessary to report the company's accounts receivable at their net realizable value at December 31, year 1.
e. Discuss briefly why the company's Allowance for Doubtful Accounts had a debit balance prior to the adjustment made in part d. How might the company change the percentages it applies to the accounts receivable aging categories to avoid future debit balances in its Allowance for Doubtful Accounts?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...