E8.4 STEPS (ASSUME COMPANY USES AN ALLOWANCE METHOD) 1. Place beginning balances into T-accounts (see yellow) 2A Record entries below. (A to D) 28. Post entries into t-accounts (on right) 3. Calculate total balances of t-accounts. 4. Finish E, F, and G. BEG. BALANCES (NOT INCLUDED IN T-ACCOUNTS YET Accounts receivable (beginning balance) Allowance for doubtful accounts (beginning balance) Instructions A1. Record net credit sales of $945,000. A2. Record cash collections from customers in the amount of $910,000. B. Write off accounts receivable in the amount of $5,200 C. Collect $1,900 from accounts previously written off. [HINT-TWO ENTRIES] D. Prepare the entry to record bad debt expense for the period. The company uses a sales approach with 2% of net credt sales being deemed perhaps uncollectable. E. Determine the ending balances in Accounts Receivable and Allowance for Doubtful Accounts. F. What is the net realizable value of the receivables at the end of the period? CASH A2 C $142,000 11,360 ACCTS RECEIVABLE beg. A1 beg. ALLOWANCE FOR D.F. ACCOUNTS SALES BAD DEBT EXPENSE D G. Calculate the Accounts Receivable Turnover and Days in Accounts Receivable Accounts Receivable Turnover Sales / Accounts Receivable Days in Accounts Receivable 360/ Accounts Receivable Turnover CHECK FIGURES BAD DEBT EXPENSE: $18,900 ALLOWANCE FOR D.F. ACCOUNTS $26,960 N.R.V. $ DAYS IN INVENTORY 144,840. aprox 65.45 de