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In-Class Question 3 At the end of 2021, Morley Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2022, it is learned that the company's receivable from Spears Inc. is not collectible and therefore management authorizes a write-off of $4,300. Instructions (a) Prepare the journal entry to record the write-off. (b) What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?

In-Class Question 3 At the end of 2021, Morley Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2022, it is learned that the company's receivable from Spears Inc. is not collectible and therefore management authorizes a write-off of $4,300. Instructions (a) Prepare the journal entry to record the write-off. (b) What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In-Class Question 3 At the end of 2021, Morley Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2022, it is learned that the company's receivable from Spears Inc. is not collectible and therefore management authorizes a write-off of $4,300. Instructions (a) Prepare the journal entry to record the write-off. (b) What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?
Transcribed Image Text:In-Class Question 3 At the end of 2021, Morley Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2022, it is learned that the company's receivable from Spears Inc. is not collectible and therefore management authorizes a write-off of $4,300. Instructions (a) Prepare the journal entry to record the write-off. (b) What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?
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