Q8.

Wilson Corporation uses an income statement approach to estimate credit losses. Its gross Accounts Receivable of $5,000,000 at the beginning of the period had a net realizable value of $4,925,000. During the period, the company wrote off actual accounts receivable of $100,000 and collected $7,835,000 from credit customers. Credit sales for the year amounted to $9,000,000. Of its credit sales, 1 percent was estimated to eventually be uncollectible.

Required:

a) Pass necessary general entry from above data

b) Determine the net realizable value of the companys accounts receivable at the end of the period. (Estimated value of uncollectable account)