At the end of 2000, before the bad debts end-of-period adjustment, Satterly Corporation had an accounts receivable balance of $129,000 and an allowance for bad debts balance of $400. Using an aging analysis, Satterly estimated that its allowance account should have a balance of $9,000 at the end of 2000. On January 2, 2001, Satterly determined that a $1,500 account receivable was not collectible, so it wrote off the customer’s account.

Required: (1) Using T-accounts, record the bad debts adjusting entry at the end of 2000.

(2) Show how the net accounts receivable would be reported on Satterly’s December 31, 2000 balance sheet.

(3) Using T-accounts, record the write-off of the account receivable on January 2, 2001.

(4) Assuming no accounts receivable were collected in early January, show the net accounts receivable at the end of the day on January 2, 2001.

(5) Explain the difference between your answers to (2) and (4). TYK-1