Question

Exercise 7-8 At the end of 2017, Sandhill Company has accounts receivable of $868,300 and an allowance for doubtful accounts of $48,100. On January 16, 2018, Sandhill Company determined that its receivable from Ramirez Company of $7,990 will not be collected, and management authorized its write-off. Prepare the journal entry for Sandhill Company to write off the Ramirez receivable. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Credit Jan. 16, 2018 SHOW LIST OF ACCOUNTS LINK TO TEXT What is the net realizable value of Sandhill Company's accounts receivable before the write-off of the Ramirez receivable? Net realizable value SHOW LIST OF ACCOUNTS LINK TO TEXT

Answer 1

Journal entry :

Date	accounts & explanation	debit	Credit
2018 jan 16	Allowance for doubtful accounts	7990
	Account receivable		7990
	(To record amount write off)

b) Net realizable value before write off :

Account receivable	868300
Allowance for doubtful accounts	(48100)
Net realizable value before write off	820200

c) Net realizable value after write off :

Account receivable (868300-7990)	860310
Allowance for doubtful accounts (48100-7990)	(40110)
Net realizable value after write off	820200