At December 31, 2012, SPK Inc reported the following information on its balance sheet:

Accounts Receivable 900,000

Allowance for Doubtful Accounts 54,000 (credit)

During 2013, the company had the following transactions related to receivables:

Sales on Account 3,000,000

Collections on Account 2,850,000

Write-offs of uncollectible accounts 60,000

Recovery of previously written off accounts 12,000

A) Assume that bad debts are estimated to be 5% of year end receivables, determine the Net Realizable Value (after adjustments) of Accounts Receivable.

B) If bad debts are estimated to be 1.5% of credit sales, determine the ending balance in the Allowance for Doubtful Accounts after adjustment.

Answer Key says

A) 940,500

B) 51,000