Question
Percent of sales method At the end of the current year, Accounts Receivable has a balance of $1,975,000; Allowance for Doubtful Accounts has a credit
Percent of sales method
At the end of the current year, Accounts Receivable has a balance of $1,975,000; Allowance for Doubtful Accounts has a credit balance of $19,670; and sales for the year total $28,550,000. Bad debt expense is estimated at ¾ of 1% of sales.
Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.
Percent of sales method
At the end of the current year, Accounts Receivable has a balance of $3,460,000; Allowance for Doubtful Accounts has a debit balance of $12,500; and sales for the year total $46,300,000. Bad debt expense is estimated at ½ of 1% of sales.
Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.
Step by Step Solution
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Step: 1
1a Calculate the uncollectible account balance Amount for uncollectible accounts to be adjusted 341 of sales 34 1 x 28550000 34285500 214125 Therefore ...
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Fundamentals of Corporate Finance
Authors: Berk, DeMarzo, Harford
2nd edition
132148234, 978-0132148238
