At the end of the current year, Accounts Receivable has a balance of $940,940; Allowance for Doubtful Accounts has a credit balance of $6,235; and sales for the year total $2,902,000. 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. $fill in the blank 1 b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. c. Determine the net realizable value of accounts receivable.
Bad Debts
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.
At the end of the current year,
a. Determine the amount of the
$fill in the blank 1
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
c. Determine the net realizable value of accounts receivable.
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
