For each of the following scenarios, indicate the amount of the adjusting journal entry for Bad Debt Expense to be recorded, the balance in Allowance for Doubtful Accounts after adjustment at December 31, and the net realizable value of Accounts Receivable at December 31. a. Based on an analysis of Simmons Company's $380,000 balance in Accounts Receivable at December 31, it was estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for Doubtful Accounts before adjustment. Bad Debt Expense $ Allowance for Doubtful Accounts at Dec. 31 Net Realizable Value of Accounts Receivable at Dec. 31 b. Blake Company had credit sales of $900,000 at year-end, an Accounts Receivable balance of $425,000 at December 31, and an Allowance for Doubtful Accounts credit balance of $11,000 before adjustment. Blake estimates bad debt expense as ¾ of 1% of credit sales. Bad Debt Expense $ Allowance for Doubtful Accounts at Dec. 31 Net Realizable Value of Accounts Receivable at Dec. 31 c. Hidgon Inc. has a balance of $812,000 in Accounts Receivable at December 31. An analysis of those receivables shows $24,000 will probably not be collected. Before adjusting entries are prepared, Allowance for Doubtful Accounts has a debit balance of $750. Bad Debt Expense $ Allowance for Doubtful Accounts at Dec. 31 Net Realizable Value of Accounts Receivable at Dec. 31
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.
For each of the following scenarios, indicate the amount of the adjusting
a. Based on an analysis of Simmons Company's $380,000 balance in Accounts Receivable at December 31, it was estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for Doubtful Accounts before adjustment.
| Bad Debt Expense | $ |
| Allowance for Doubtful Accounts at Dec. 31 | |
| Net Realizable Value of Accounts Receivable at Dec. 31 |
b. Blake Company had credit sales of $900,000 at year-end, an Accounts Receivable balance of $425,000 at December 31, and an Allowance for Doubtful Accounts credit balance of $11,000 before adjustment. Blake estimates bad debt expense as ¾ of 1% of credit sales.
| Bad Debt Expense | $ |
| Allowance for Doubtful Accounts at Dec. 31 | |
| Net Realizable Value of Accounts Receivable at Dec. 31 |
c. Hidgon Inc. has a balance of $812,000 in Accounts Receivable at December 31. An analysis of those receivables shows $24,000 will probably not be collected. Before
| Bad Debt Expense | $ |
| Allowance for Doubtful Accounts at Dec. 31 | |
| Net Realizable Value of Accounts Receivable at Dec. 31 |
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