1. Valve Manufacturing Corporation has the following outstanding accounts receivable totaling JPY2.54 million as of December 31 and sales on credit during the year of JPY12.8 million. There is also a debit balance of JPY6,000 in the allowance for doubtful accounts. If the company estimates that 1% of its net credit sales will be uncollectible, what should be the year-end adjusted balance of the allowance for doubtful accounts?

2. Apple Merchandising had net sales in 2011 of JPY700,000. At December 31, 2011, before adjusting entries, the balances in selected accounts were: accounts receivable JPY125,000 debit, and allowance for doubtful accounts JPY1,200 credit. Cong Son estimates that 2% of its net sales will prove to be uncollectable. What is the cash realizable value of the receivables reported on the statement of financial position at December 31, 2012?