7-2 Presented below are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1.Pronghorn Companys unadjusted trial balance at December 31, 2017, included the following accounts.
| Debit | Credit |
| Accounts receivable | $50,500 |
| Allowance for doubtful accounts | $5,670 |
| Net sales | $1,255,000 |
Pronghorn Company estimates its bad debt expense to be5% of gross accounts receivable. Determine its bad debt expense for 2017.
| Bad debt expense for 2017 | $ |
2.An analysis and aging of Stellar Corp. accounts receivable at December 31, 2017, disclosed the following.
| Amounts estimated to be uncollectible | $182,490 |
| Accounts receivable | 1,776,700 |
| Allowance for doubtful accounts (per books) | 127,430 |
What is the net realizable value of Stellars receivables at December 31, 2017?
| The net realizable value | $ |
3.Pearl Co. provides for doubtful accounts based on3% of gross accounts receivable, The following data are available for 2017.
| Credit sales during 2017 | $3,298,300 |
| Bad debt expense | 58,990 |
| Allowance for doubtful accounts 1/1/17 | 16,550 |
| Collection of accounts written off in prior years (customer credit was reestablished) | 7,280 |
| Customer accounts written off as uncollectible during 2017 | 28,560 |
What is the balance in Allowance for Doubtful Accounts at December 31, 2017?
| The balance in Allowance for Doubtful Accounts | $ |
4.At the end of its first year of operations, December 31, 2017, Martinez Inc. reported the following information.
| Accounts receivable, net of allowance for doubtful accounts | $925,900 |
| Customer accounts written off as uncollectible during 2017 | 23,030 |
| Bad debt expense for 2017 | 86,750 |
What should be the balance in accounts receivable at December 31, 2017, before subtracting the allowance for doubtful accounts?
| Accounts receivable, before deducting allowance for doubtful accounts | $ |
5.The following accounts were taken from Sandhill Inc.s trial balance at December 31, 2017.
| Debit | Credit |
| Net credit sales | $823,700 |
| Allowance for doubtful accounts | $12,620 |
| Accounts receivable | 305,200 |
If doubtful accounts are3% of accounts receivable, determine the bad debt expense to be reported for 2017.
| The bad debt expense, as adjusted | $ |
Record the two journal entries that should be recorded by Cheyenne Inc. for the sales transactions above that took place on July 1, 2017.(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
| No. | Date | Account Titles and Explanation | Debit | Credit |
| 1. | July 1, 2017 | | | |
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| 2. | July 1, 2017 | | | |
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