3. Determine the expected net realizable value of the accounts receivable as of December 31 (after all of the adjustments and the adjusting entry).$fill in the blank c1967008e049075_14. Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry on December 31 had been based on an estimated expense of ½ of 1% of the sales of $8,760,000 for the year, determine the following:a. Bad debt expense for the year.b. Balance in the allowance account after the adjustment of December 31.c. Expected net realizable value of the accounts receivable as of December Accounts Recelvable-Harry Carr4,565Dec. 31-write-off Allowance for Doubtful Accounts27,470Accounts Receivable-Cavey Co.12,070Accounts Receivable-Fogle Co.3,585 VAccounts Receivable-Lake Furniture9,210Accounts Receivable-Melinda Shryer2,605Dec. 31-adjusting Bad Debt ExpenseAllowance for Doubtful AccountsFeedbackCheck My WorkSet up T accounts.Recall that under the allowance method, the entry to write off an account debits Allowance for Doubtful Accounts and credits Accounts Receivable.In such cases where an account receivable that has been written off is later collected, the account is reinstated by an entry that reverses the write-off entry. Then record the receipt of cash as payment for the account.The amount of bad debt expense is affected by the balance in the allowance account.2. b. Post each entry that affects the following T accounts and determine the new balances:Allowance for Doubtful AccountsApr. 316,040 VJan. 1 Balance58,800July 1618,720 VJan. 192,800Dec. 3127,470 VNov. 234,565Dec. 31 Unadjusted BalanceDec. 31 Adjusting EntryDec. 31 Adjusted BalanceBad Debt ExpenseDec. 31 Adjusting Entry Entries Related to Uncollectible AccountsThe following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31:Jan. 19.Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,800 cash infull payment of Arlene's account.Apг. 3Wrote off the $16,040 balance owed by Premier GS Co., which is bankrupt.July 16Received 35% of the $28,800 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible.Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4565 cash in fullNov. 23.payment.Dec. 31.Wrote off the following accounts as uncollectible (one entry): Cavey Co.,$12,070; Fogle Co., $3,585; Lake Furniture, $9,210; Melinda Shryer, $2,605.Dec. 31.Based on an analysis of the $1,419,100 of accounts receivable, it was estimated that $61,700 will be uncollectible. Journalized the adjusting entry.Required:1. Record the January 1 credit balance of $58,800 in a T account presented below in requirement 2b for Allowance for Doubtful Accounts.2. a. Journalize the transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Note: For the December 31 adjusting entry, assume the $1,419,100 balance in accounts receivable reflects the adjustments made during the year.Jan. 19-reinstate Accounts Receivable-Arlene GurleyAllowance for Doubtful Accounts2,8002,800Jan. 19-collection Cash2,800Accounts Receivable-Arlene Gurley2,800Apг. 3Allowance for Doubtful Accounts16,040Accounts Receivable-Premier GS Co.16,040July 16Cash10,080Allowance for Doubtful Accounts18,720Accounts Receivable-Hayden Co.28,800Nov. 23-reinstate Accounts Receivable-Harry CarrAllowance for Doubtful Accounts4,5654,565 VNov. 23-collection Cash4,565V

>Bad debt expense is recorded in the books of account using two methods:#1: Direct write off…

Answered: 3. Determine the expected net…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q