The following transactions were completed by Daws Company during the current fiscal year ended December 31:

Jan. 29	Received 35% of the $18,100 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible.
Apr. 18	Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,300 cash in full payment of Clarks account.
Aug. 9	Wrote off the $6,350 balance owed by Iron Horse Co., which has no assets.
Nov. 7	Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,865 cash in full payment of the account.
Dec. 31	Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,105; DeVine Co., $5,435; Moser Distributors, $9,390; Oceanic Optics, $1,075.
Dec. 31	Based on an analysis of the $1,796,000 of accounts receivable, it was estimated that $35,920 will be uncollectible. Journalized the adjusting entry.

Required:

1.

Record the January 1 credit balance of $26,080 in a T account for Allowance for Doubtful Accounts.

2.

A.	Journalize the transactions. For the December 31 adjusting entry, assume the $1,796,000 balance in accounts receivable reflects the adjustments made during the year. Refer to the chart of accounts for a listing of the account titles the company uses.
B.	Post each entry that affects the following selected T accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense.

3.

Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).

4.

Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables the adjusting entry on December 31 had been based on an estimated expense of of 1% of the sales of $18,260,000 for the year, determine the following:

A.	Bad debt expense for the year.
B.	Balance in the allowance account after the adjustment of December 31.
C.	Expected net realizable value of the accounts receivable as of December 31

CHART OF ACCOUNTS Daws Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 121 Accounts Receivable-Kovar Co. 122 Accounts Receivable-Spencer Clark EXPENSES 510 Cost of Merchandise Sold 123 Accounts Receivable-Iron Horse Co. 124 Accounts Receivable-Vinyl Co. 125 Accounts Receivable-Beth Connelly Inc. 126 Accounts Receivable-DeVine Co. 127 Accounts Receivable-Moser Distributors 128 Accounts Receivable-Oceanic Optics 129 Allowance for Doubtful Accounts 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 151 Prepaid Insurance 181 Land 536 Credit Card Expense 537 Cash Short and Over 191 Store Equipment 192 Accumulated Depreciation Store Equipment 538 Bad Debt Expense 193 Office Equipment 539 Miscellaneous Expense 194 Accumulated Depreciation Office Equipment 710 Interest Expense LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Daws, Capital 311 Daws, Drawing 312 Income Summary T Accounts Shaded cells have feedback 1. Record the January 1 credit balance of $26,080 in a T account for Allowance for Doubtful Accounts. 2. B. Post each entry that affects the following selected T accounts and determine the new balances: Allowance for Doubtful Accounts and Bad Debt Expense. Allowance for Doubtful Accounts Jan. 29 V 11,765 V Jan. 1 Balance 26,080 Aug. 9 6,350 Apr. 18V 7,300 Dec. 31 23,005 Nov. 7 3,865 Dec. 31 Adjusting Entry 23,005 X Dec. 31 Unadjusted Balance 6,530 X Dec. 31 Adj. Balance 35,920 Bad Debt Expense Dec. 31 Adjusting Entry 51,140 X Points: 15 / 18 145 Office Supplies 533 Insurance Expense Journal Shaded cells have feedback 2. A. Journalize the transactions. For the December 31 adjusting entry, assume the $1,796,000 balance in accounts receivable reflects the adjustments made during the year. Refer to the chart of accounts for a listing of the account titles the company uses. All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback. B. Balance in the allowance account after the adjustment of December 31. -$45,650 X C. Expected net realizable value of the accounts receivable as of December 31. $1,702,715 X Instructions Final Questions Shaded cells have feedback. 3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry). $1,702,715 X Points: 0/1