At the end of 2024, Larkspur Co. has accounts receivable of $675,100 and an allowance for doubtful accounts of $24,370. On January 24, 2025, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,127. (a) Prepare the journal entry to record the write-off. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (b) What is the cash realizable value of the accounts receivable before the write-off and after the write-off? Before Write-Off After Write-Off Cash realizable value $ $
At the end of 2024, Larkspur Co. has accounts receivable of $675,100 and an allowance for doubtful accounts of $24,370. On January 24, 2025, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,127. (a) Prepare the journal entry to record the write-off. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (b) What is the cash realizable value of the accounts receivable before the write-off and after the write-off? Before Write-Off After Write-Off Cash realizable value $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:At the end of 2024, Larkspur Co. has accounts receivable of $675,100 and an allowance for doubtful accounts of $24,370. On January
24, 2025, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a
write-off of $4,127.
(a)
Prepare the journal entry to record the write-off. (List debit entry before credit entry. Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Debit
Credit
(b)
What is the cash realizable value of the accounts receivable before the write-off and after the write-off?
Before Write-Off
After Write-Off
Cash realizable value
$
$
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