Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $304,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 6% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,200 before adjustment?

Select the correct answer.

Bad Debt Expense$15,540

Accounts Receivable$15,540

Bad Debt Expense$16,040

Allowance for Doubtful Accounts$16,040

2.

After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $687,145 and Allowance for Doubtful Accounts has a balance of $24,857. What is the net realizable value of the accounts receivable?

Select the correct answer.

$662,288

$24,857

$712,002

$687,145