The following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31:

Jan. 19.Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,660 cash in full payment of Arlene's account.

Apr. 3.Wrote off the $12,750 balance owed by Premier GS Co., which is bankrupt.

July 16.Received 25% of the $22,000 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible.

Nov. 23.Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,000 cash in full payment.

Dec. 31.Wrote off the following accounts as uncollectible (one entry): Cavey Co., $3,300; Fogle Co., $8,100; Lake Furniture, $11,400; Melinda Shryer, $1,200.

31.Based on an analysis of the $2,350,000 of accounts receivable, it was estimated that $60,000 will be uncollectible. Journalized the adjusting entry.

Instructions

1. Record the January 1 credit balance of $50,000 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:

Allowance for Doubtful AccountsBad Debt Expense

Determine the expected net realizable value of the accounts receivable as of December 31.