Question

Company X had the following information before adjustments:

Accounts receivable $230,000 (debit balance)

Allowance for doubtful accounts $3400 (credit balance)

Sales revenue (on credit) $1,580,000 (credit balance)

Sales returns and allowances $85,000 (debit balance)

Prepare the journal entry to record bad debt expense if the company estimates it to be 3% of receivables. Now assume the company determines that $3,000 will never be received. Prepare the journal entry to record the write-off. What is the net amount expected to be collected of the receivables after the write-off?