At the beginning of the current period, Hughes Corp. had balances in accounts receivable of $200,000...

At the beginning of the current period, Hughes Corp. had balances in accounts receivable of $200,000 and in allowance for doubtful account of $9,000 (credit)

Prepare the entries to record the following tracsactions during the period.

1) Hughes has net credit sales of $800,000 and collections of $743,000

2)Hughes wrote off as uncollectible account receivable of $7,000

3) A $4,000 account previously written off as uncollectible was recovered before the end of the current period

4) uncollectible account are estimated to total $25,000 at the end of the period.

5)What is the net realizable value of the receivable at the end of the period?

Expert Solution

Journal entry:

No	Accounts & explanation	debit	credit
1)	Account receivable	800000
	Sales revenue		800000
	(To record credit sales)

	Cash	743000
	Account receivable		743000
	(To record collection from customer)

2)	Allowance for doubtful accounts	7000
	Account receivable		7000
	(To record amount write off)

3)	Account receivable	4000
	Allowance for doubtful accounts		4000
	(TO record amount reinstated)

	Cash	4000
	Account receivable		4000
	(To record amount collected)

4)	Bad debt expense (9000-7000+4000-25000)	19000
	Allowance for doubtful accounts		19000
	(To record adjusting entry)

Calculate net realizable value :

Account receivable = (200000+800000-743000) = 250000

Allowance for doubtful accounts = 25000

net realizable value = 250000-25000 = 225000

ekkarill92 answered 1 year ago

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