Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the companys fiscal year-end. The 2020 balance sheet disclosed the following:

Current assets:
Receivables, net of allowance for uncollectible accounts of $30,000	$	430,000

During 2021, credit sales were $1,000,000, cash collections from customers $750,000 and $20,000 in accounts receivable were written off. In addition, $6,000 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:

	Percentage of Year-End	Percent
Age Group	Receivables in Group	Uncollectible
060 days	75	%	3	%
6190 days	15		10
91120 days	7		25
Over 120 days	3		40

1. What is the gross accounts receivable balance on 12/31/2020?

2.What is the impact on the net realizable value of accounts receivable after the write off of $20,000 of accounts receivable?

3.What is the balance in the allowance for doubtful accounts before any entries are made during 2021 for either the income statement or balance sheet approach?

4. Based upon aging indicated above, what is the required entry for allowance for bad debt expense at the end of 2021?

5. Assuming bad debts are recorded based on 4% of credit sales, what is the journal entry required?

6. What is the net realizable value of accounts receivable at 12/31/2021, based on the aging of accounts receivable reported on the balance sheet? 7. What is the net realizable value of accounts receivable at 12/31/2021 based on the income statement approach, reported on the balance sheet?