a)

At the end of the current year, Accounts Receivable has a balance of $500,000; Allowance for Doubtful Accounts has a credit balance of $4,500; and net sales for the year total $4,700,000. Bad debt expense is estimated at 1.0% of net sales.

Determine: (make sure to label your answers)

(a) the amount of the adjusting entry for bad debt expense;

(b) the adjusted balance of Allowance of Doubtful Accounts;

(c) the net realizable value of accounts receivable.

b.

Equipment with a 7 year life was purchased on January 1st this year at a cost of $30,000 and it had an estimated residual value of $1,800

Required: Determine the (a) depreciable cost, (b) straight-line rate, and (c) annual straight-line depreciation.

Label your answers and show your work.