The following transactions were completed by The Corion Gallery during the current fiscal year ended December 31:
Instructions
1. Record the January 1 credit balance of $41,500 in a T-account for Allowance for Doubtful Accounts.
2. Journalize the transactions. Post each entry that affects the following T-accounts and determine the new balances:
3. Determine the expected net realizable value of the accounts receivable as of December 31.
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 1⁄2 of 1% of the net sales of $10,380,000 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.