Percent of Sales Method

At the end of the current year, Accounts Receivable has a balance of $600,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,700,000. Bad debt expense is estimated at 3/4 of 1% of sales.

a. Determine the amount of the adjusting entry for uncollectible accounts.

$

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

Adjusted Balance

Debit (Credit)

Accounts Receivable $

Allowance for Doubtful Accounts $

Bad Debt Expense $

c. Determine the net realizable value of accounts receivable.

$