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Aardvark Company sells merchandise only on credit. For the year ended December 31, 2019, the following data are available: Sales (all on credit) $1,200,000 Accounts
Aardvark Company sells merchandise only on credit. For the year ended December 31, 2019, the following data are available:
Sales (all on credit) | $1,200,000 |
Accounts Receivable, January 1, 2019 | 225,000 |
Allowance for doubtful accounts, January 1, 2019 (credit) | 15,000 |
Cash collections during 2019 | 1,050,000 |
Accounts written off as uncollected (default) during 2019 | 10,000 |
- Determine the balance of Accounts Receivable at December 31, 2019.
- Assume that the company estimates bad debts at 2% of credit sales. What amount will the company record as bad debt expense for 2019?
- What journal entry would Aardvark prepare to record bad debt expense for 2019 (related to part B)?
- Assume that the company estimates bad debts based on the aging method, and the aging schedule estimates that $30,100 of the year-end accounts receivable will be uncollected. What amount will the company record as bad debt expense for 2019?
- What journal entry would Aardvark prepare to record bad debt expense for 2019 (related to part D)?
- What is the net realizable value of the receivables (i.e., Net A/R) to be reported on the balance sheet at year-end (assuming the A/R aging method was used by Aardvark)?
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