E7-8B (L03) (Recording Bad Debts) At the end of 2017 Sanchez Company has accounts receivable of $400,000 and an allowance for doubtful accounts of $20,000. On January 16, 2018, Sanchez Company determined that its receivable from Maximillian Company of $3,000 will not be collected, and management authorized its write-off.

Instructions

(a) Prepare the journal entry for Sanchez Company to write off the Maximillian receivable.

(b) What is the net realizable value of Sanchez Company's accounts receivable before the write-off of the Maximillian receivable?

(c) What is the net realizable value of Sanchez Companys accounts receivable after the write-off of the Maximillian receivable?