On April 2, 2017, A company estimates $50,000 of accounts receivables will be uncollectible. The allowance for doubtful accounts is a credit balance of $8,000 and the accounts receivable balance is $500,000.

1.

1-1. If a company uses a percentage of receivables basis to estimate its bad debts, Please indicate the changes in the statement of financial position accounts as a result of the amount of the bad debt adjusting entry at end of the year. 1.2 please try to confirm the Cash realizable value of the Account Receivable on the financial position at end of the year.

2. The total credit sales for 2017 are $100,000 and about 2% of credit sales will become uncollectible. If a company uses percentage of sales basis to estimate its bad debts, try to describe the changes and confirm the cash realizable value of the accounts receivable reported on the financial position statement at end of the year.