Question

At the end of the current year, Accounts Receivable has a balance of $918,390; Allowance for Doubtful Accounts has a credit balance of $5,155; and sales for the year total $3,034,000. Bad debt expense is estimated at 1/2 of 1% of net sales.

a. Determine the amount of the adjusting entry for bad debt expense. (AMOUNT HERE)
$

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. (AMOUNTS FOR THESE)

	Adjusted Balance
Accounts Receivable	$
Allowance for Doubtful Accounts
Bad Debt Expense

c. Determine the net realizable value of accounts receivable. (AMOUNT HERE)
$

Answer 1

Solution :-

a. The amount of the adjusting entry for bad debt expense is $ 15,170. Journal entries and Ledger accounts are prepared for better understanding.

b. The adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense are as follows -

Accounts Receivable	$ 918,390
Allowance for Doubtful Accounts	$ 5,155
Bad Debts Expense	$ 15,170

c. The net realizable value of Accounts Receivable is as follows -