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lesantik [10]
2 years ago
15

At the end of the current year, Accounts Receivable has a balance of $825,000; Allowance for Doubtful Accounts has a credit bala

nce of $7,500; and sales for the year total $3,710,000. Bad debt expense is estimated at 1/4 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.

Accounts Receivable:
Allowance for Doubtful Accounts:
Bad Debt Expense:

c. Determine the net realizable value of accounts receivable.
Business
1 answer:
ehidna [41]2 years ago
6 0

A. The amount of the adjusting entry for uncollectible accounts is <u>$1,775</u>.

B. The adjusted balances of the Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense are:

Accounts Receivable: $4,535,000

Allowance for Doubtful Accounts: $9,275

Bad Debt Expense: $1,775

C. The net realizable value of the accounts receivable is <u>$4,525,725</u>.

<h3>What is the net realizable value of accounts receivable?</h3>

The net realizable value of accounts receivable is the estimated collections that can be recovered from credit customers.

It is the difference between the total credit sales and the allowance for doubtful accounts.

<h3>Data and Calculations:</h3>

Ending balances:

Accounts Receivable  $825,000 DR

Allowance for Doubtful Accounts $7,500 CR

Sales = $3,710,000

Estimated bad debt expense = 0.0025 (1/4 of 1%) of sales

= $9,275 ($3,710,000 x 0.0025)

A. The amount of the adjusting entry for uncollectible accounts is $1,775 ($9,275 - $7,500).

B. The adjusted balances of the Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense are:

Accounts Receivable: $4,535,000 ($825,000 + $3,710,000)

Allowance for Doubtful Accounts: $9,275

Bad Debt Expense: $1,775

C. The net realizable value of the accounts receivable is $4,525,725 ($4,535,000 - $9,275).

Learn more about the net realizable value of accounts receivable at brainly.com/question/22984282

#SPJ1

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4 0
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LO 7.3Which is not a section of the cash budget?
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Answer:

allowance for uncollectible accounts

Explanation:

The cash budget represents the cash inflow and cash outflow position with respect of cash receipts and cash payments i.e cash disbursement plus it also involves financing needs i.e how much amount is to be borrowed

But it does not involve the allowance for uncollectible accounts  as it is not shown in the cash budget because it is shown under the debtors side with the negative amount of the balance sheet

Like

Assets

Current Assets

Account receivable                                             XXXXX

Less: Allowance for uncollectible accounts       XXXXX  

Net account receivable                                      XXXXX

8 0
3 years ago
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