A series of unrelated situations follow for several companies that use ASPE:

1. Atlantic Inc.?s unadjusted trial balance at December 31, 2020, included the following accounts:

2. An analysis and aging of Central Corp.?s accounts receivable at December 31, 2020, disclosed the following:

Amounts estimated to be uncollectible ........................................................... $ 160,000Accounts receivable ............................................................................................ 1,790,000Allowance for doubtful accounts (per books) ..................................................... 125,000

3. Western Co. provides for doubtful accounts based on 4.5% of credit sales. The following data are available for 2020:Credit sales during 2020 ................................................................................. $3,200,000Allowance for doubtful accounts 1/1/20 .............................................................. 37,000Collection of accounts written off in prior years(customer credit was re-established) .................................................................... 18,000Customer accounts written off as uncollectible during 2020 ............................. 36,000

4. At the end of its first year of operations, on December 31, 2020, Pacific Inc. reported the following information:

Accounts receivable, net of allowance for doubtful accounts ........................ $950,000Customer accounts written off as uncollectible during 2020 ............................. 24,000Bad debt expense for 2020 ..................................................................................... 92,0005. The following accounts were taken from Northern Inc.?s unadjusted trial balance at December 31,2020:

Instructions

a. For situation 1, Atlantic estimates its bad debt expense to be 1.5% of net sales. Determine its bad debt expense for 2020.

b. For situation 2, what is the net realizable value of Central Corp.?s receivables at December 31, 2020?

c. For situation 3, what is the balance in Allowance for Doubtful Accounts at December 31, 2020?

d. For situation 4, what is the balance in Accounts Receivable at December 31, 2020, before subtracting the allowance for doubtful accounts?

e. For situation 5, if doubtful accounts are 7% of accounts receivable, what is the bad debt expense amount to be reported for 2020?

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Debit Credit Allowance for doubtful accounts Sales revenue Sales returns and allowances Sales discounts $8,000 $1,980,000 60,000 4,400 Debit Credit Sales revenue (all on credit) Sales discounts Allowance for doubtful accounts Accounts receivable $950,000 $ 21,400 34,000 610,000