The 12/31/20 trial balance of Krishnan Corp. shows the following balances, before adjustments:

DR CR

Accounts receivable $2,022,000

Allowance for doubtful accounts $6,100

Sales made during the year, 100% on credit $3,015,800

Required: Using each of the two following independent situations, provide (a) the adjusting entry for estimated bad debts, and (b) the net realizable value of accounts receivable at 12/31/20. Show your calculations. I recommend using T-accounts.

1) An aging analysis of accounts receivable indicates that an allowance balance of $84,100 is required. The company uses the allowance method.

a) Adjusting journal entry for estimated bad debts:

b) Net realizable value of accounts receivable at 12/31/20: