At the end of the current year, ARS Industries has the following account balances before making an adjusting entry for uncollectible accounts:

The company recorded $3,500,000 of credit sales during the year. The company uses the percent of sales method and estimates that ½ of 1% of credit sales for the year will be uncollectible.

a. Determine the bad debt expense for the period, and journalize the adjusting entry.

b. Determine the adjusted balances of Allowance for Doubtful Accounts and Accounts Receivable.

c. Determine the net realizable value of accounts receivable at the end of the period.

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Accounts Receivable Allowance for Doubtful Accounts $800,000 debit 7,500 credit