At the end of 2007, Wendy Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $28,000. On January 24, 2008, it is learned that the company’s receivable from Mayfield Inc. is not collectible and therefore management authorizes a write-off of $3,000.

(a) Prepare the journal entry to record the write-off.

(b) What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?