Alice Bookstore has credit sales of $40,000 in 2012 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2012, $25,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $5,000 will prove to be uncollectible.

Instructions

(a) Prepare the year-end adjusting entry to record the estimated uncollectible accounts expense in 2012.

(b) Show the balance sheet presentation of accounts receivable on December 31, 2012.

(c) On June 16, 2013 the credit manager authorizes a write-off of the $2,000 balance owed by James. Make the appropriate entry to record the write off of the James account. Also show the balance sheet presentation of accounts receivable after the write-off.