Percent of Sales Method

At the end of the current year,Accounts Receivablehas a balance of $885,000;Allowance for Doubtful Accountshas a debit balance of $8,000; and sales for the year total $3,980,000.Bad debt expenseis estimated at 1/4 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.

Accounts Receivable$Allowance for Doubtful Accounts$Bad Debt Expense$

c.Determine thenet realizable valueof accounts receivable.

$