Reference no: EM132865111

Question -

Q1) Percent of sales method At the end of the current year, Accounts Receivable has a balance of $3,750,000, Allowance for Doubtful Accounts has a credit balance of $22,750, and sales for the year total $48,400,000. Bad debt expense is estimated at 3⁄4 of 1% of sales.

(a) Determine the amount of the adjusting entry for uncollectible accounts.

(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.

Q2) Analysis of receivables method - At the end of the current year, Accounts Receivable has a balance of $3,750,000, Allowance for Doubtful Accounts has a credit balance of $22,750, and sales for the year total $48,400,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $390,000.

a) Determine the amount of the adjusting entry for uncollectible accounts.

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.