Ferrell Corporation reported the following data for the year: The beginning balance in the Allowance for Uncollectible Accounts was a debit balance of $6,400. The beginning balance in Accounts Receivable was $495,000. Throughout the year, the company had cash sales of $528,000 and credit sales of $873,000. During the year, the company collected $568,000 on the outstanding Accounts Receivable. On June 1 of the current year, the company learned that one of its customers, Prophat Inc., had declared bankruptcy and would never be able to pay off its outstanding account of $9,300. Two years ago, Ferrell Company had properly written off as uncollectible the $13,500 account of its insolvent customer, Vaughn Inc. Subsequently, Vaughn Inc. made a financial comeback and, on November 2 of the current year, fully repaid its debt to Ferrell Corporation. The company uses the balance sheet approach to estimate the allowance for doubtful accounts by using the aging of Accounts Receivable. The following provides the detailed aging on 12/31: 0-30 days balance is $345,000, 31-45 days balance is $195,200, 46-90 days balance is $84,350, 91-120 days balance is $116,500 and over 120 days balance is $49,650. The company has estimated their proportion of AR that they expect to default for each category as: : 0-30 days balance is 0.5%, 31-45 days balance as 4%, 46-90 days balance as 16%, 91-120 days balance as 57% and over 120 days balance as 88%.

Required:

a) Prepare the journal entries for June 1 and November 2.

b) Prepare the journal entry for December 31 to record the estimated bad debt expense for the year.

c) Using T-accounts, show all of the current year activity in the companys AR and Allowance accounts.

d) What is the amount of the Net Realizable Value of Accounts Receivable on 12/31?