Reference no: EM132699647

Question - The asset section of the Walker Co. Balance Sheet (final balances) for the year ended 12/31/19 is shown below.

Walker Company December 31, 2019

Cash $220,000

Accounts Receivable 70,100

Allowance for Doubtful Accounts (8,000)

Office Supplies 3,000

Prepaid Rent 20,400

Office Furniture 70,200

Less: Accumulated Depreciation-Furniture (6,000)

The Walker Company 12/31/2019 Income Statement shows a "Bad Debt Expense" of $9,000.

Required -

A. Given the data as shown above, please indicate the amount of Accounts Receivable that Walker expects to collect in the year 2020.

B. Walker prepares financial statements once a year at 12/31 and therefore, makes adjusting journal entries only once a year. Please indicate the year end adjusting entry that Walker Co. made on 12/31/19 to estimate bad debts.

C. Did Walker Company overestimate, underestimate or estimate perfectly the dollar amount of accounts receivable that were going to be deemed uncollectible in the year 2019?

D. Assume that on April 17, 2020, a customer account in the amount of $4,000 is deemed to be uncollectible due to a bankruptcy. Make the necessary journal entry to record this event.