Question 1

a.

b.

Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $565,000; Allowance for Doubtful Accounts has a credit balance of $5,000; and sales for the year total $2,540,000. Bad debt expense is 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 A Bad Debt Expense A c. Determine the net realizable value of accounts receivable. Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $865,000; Allowance for Doubtful Accounts has a debit balance of $8,000; and sales for the year total $3,890,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $40,800. 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 the net realizable value of accounts receivable. $