Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $4,375,000; Allowance for Doubtful Accounts has a debit balance of $21,300; and sales for the year total $102,480,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $205,000. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable. $

Question

Business

Mina Cochran

8 February, 19:56

Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $4,375,000; Allowance for Doubtful Accounts has a debit balance of $21,300; and sales for the year total $102,480,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $205,000. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable. $

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Answers (1)

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Melvin Buck · Answer 1

The answers are given below;

Explanation:

a. Allowance for doubtful accounts-opening debit balance $21,300

Allowance for doubtful accounts for the year $205,000

Bad Debt Expense $226,300

b.

The Adjusted Balance of Accounts Receivables $4,375,000

Adjusted Balance of Allowance for Doubtful Accounts $205,000

Adjusted Balance of Bad Debt Expense $226,300

c.

Net realizable value of Accounts Receivable = Accounts Receivables-Allowance for doubtful accounts=$4,375,000-$205,000=$4,170,000