Percent of Sales Method At the end of the current year, Accounts Receivable has a balance...

Percent of Sales Method

At the end of the current year, Accounts Receivable has a balance of $680,000; Allowance for Doubtful Accounts has a debit balance of $6,000; and sales for the year total $3,060,000. Bad debt expense is estimated at 1/4 of 1% of sales.

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.
$

Solutions

Expert Solution

Answer

a
Amount of adjusting entry	$ 7,650	30600001%1/4

b
Accounts Receivable	$ 680,000
Allowance for Doubtful Accounts	$ 1,650	7650-6000
Bad Debt expense	$ 7,650

c
Accounts Receivable	$ 680,000
Less: Allowance for Doubtful Accounts	$ 1,650
Net realizable value	$ 678,350

ekkarill92 answered 1 year ago

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