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. Nash Companys unadjusted trial balance at December 31, 2017, included the following accounts.

		Debit		Credit
Accounts receivable		$49,900
Allowance for doubtful accounts		$7,790
Net sales				$1,279,500

Nash Company estimates its bad debt expense to be 8% of gross accounts receivable. Determine its bad debt expense for 2017.

Bad debt expense for 2017

$

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

Amounts estimated to be uncollectible		$ 182,680
Accounts receivable		1,791,100
Allowance for doubtful accounts (per books)		126,160

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

The net realizable value

$

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

Credit sales during 2017		$2,194,000
Bad debt expense		59,700
Allowance for doubtful accounts 1/1/17		18,020
Collection of accounts written off in prior years (customer credit was reestablished)		7,780
Customer accounts written off as uncollectible during 2017		31,000

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

The balance in Allowance for Doubtful Accounts

$

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

Accounts receivable, net of allowance for doubtful accounts		$910,400
Customer accounts written off as uncollectible during 2017		24,860
Bad debt expense for 2017		88,760

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

$

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

		Debit		Credit
Net credit sales				$687,000
Allowance for doubtful accounts		$15,060
Accounts receivable		309,200

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

The bad debt expense, as adjusted

$