What is the new net realizable value of the receivable

Assignment Help Accounting Basics

Reference no: EM131920454

Problem

Morgan Company provides you with an aged accounts receivable balance as follows:

Days Outstanding        $ Amount        Est % Uncollectible
         0 -30                2,350,000                    3%
         31-60               1,110,000                    7%
         61-90                   750,000                   8%
         91-120                 300,000                   10%
         120+                    62,000                   100%

total 4,572,000

The current allowance for doubtful accounts balance before write-offs is $91,000.

Required:

Assuming Ethan Co uses the balance sheet (AR balance) approach:

-Record the write off of uncollectible accounts.

-What is the new allowance for doubtful accounts balance after all adjustments?

-What is the bad debt expense, record the entry.

-What is the new Net Realizable Value of the receivable on the balance sheet?

Reference no: EM131920454

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