Problem 7-2

Presented below are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1. Shamrock Companys unadjusted trial balance at December 31, 2017, included the following accounts.

		DEBIT		CREDIT
Accounts receivable		$53,600
Allowance for doubtful accounts		$5,450
Net sales				$1,209,200

Shamrock Company estimates uncollectible accounts to be 6% of gross accounts receivable. Determine its bad debt expense for 2017

Bad debt expense for 2017: $

2. An analysis and aging of Bridgeport Corp. accounts receivable at December 31, 2017, disclosed the following.

Amounts estimated to be uncollectible		$ 181,130
Accounts receivable		1,774,300
Allowance for doubtful accounts (per books)		126,200

What is the net realizable value of Bridgeports receivables at December 31, 2017?

The net realizable value: $

3. Indigo Co. provides for doubtful accounts based on 4% of gross accounts receivable, The following data are available for 2017.

Credit sales during 2017		$2,423,400
Bad debt expense		57,590
Allowance for doubtful accounts 1/1/17		15,880
Collection of accounts written off in prior years (customer credit was reestablished)		8,340
Customer accounts written off as uncollectible during 2017		29,140

What is the balance in Allowance for Doubtful Accounts at December 31, 2017?

Accounts receivable, net of allowance for doubtful accounts		$986,400
Customer accounts written off as uncollectible during 2017		24,890
Bad debt expense for 2017		88,450

4. At the end of its first year of operations, December 31, 2017, Sweet Inc. reported the following information.

The balance in Allowance for Doubtful Accounts: $

What should be the balance in accounts receivable at December 31, 2017, before subtracting the allowance for doubtful accounts?

Accounts receivable, before deducting allowance for doubtful accounts: $

DEBIT CREDIT

Net credit sales				$714,400
Allowance for doubtful accounts		$14,760
Accounts receivable		340,100

5. The following accounts were taken from Pharoah Inc.s trial balance at December 31, 2017.

If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 2017.

The bad debt expense, as adjusted