Question 1:

At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $6,500; and sales for the year total $3,250,000. Bad debt expense is estimated at of 1% of sales (0.50 X 1% = 0.005).

Determine:

1. the amount of the adjusting entry for uncollectible accounts;
2. the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and
3. the net realizable value of accounts receivable.