Answer:
Explanation:
The net realizable values are as follows:
a. For Accounts Receivable
Ending balance of account receivable = Beginning balance of account receivable + credit sales - collections - uncollectible amount
= $201,400 + $840,400 - $758,910 - $8,026
= $274,864
b. For Allowance for Doubtful Accounts
= Beginning balance + previously written off amount - uncollectible amount + bad debt expense
= $8,570 + $2,889 - $8,026 + $19,747
= $23,180
Now the journal entries are shown below:
a. Accounts receivable A/c $840,400
To Sales revenue A/c $840,400
(Being the sales is recorded)
Cash A/c Dr $758,910
To Sales revenue A/c $758,910
(Being the collection is recorded)
b. Allowance for Doubtful Accounts A/c Dr $8,026
To Account receivable A/c $8,026
(Being uncollected amount is recorded)
c. Accounts Receivable Dr A/c Dr $2,889
To Allowance for Doubtful Accounts A/c $2,889
(Being uncollected amount is recorded)
Cash A/c Dr $2,889
To Accounts Receivable A/c Dr $2,889
(Being recovery of uncollectible amount is recorded)
d. Bad debt expense A/c Dr $19,747
To Allowance for doubtful debts $19,747
(Being bad debt expense is recorded)
The computation is shown below
= $23,180 - ($8,570 + $2,889 + $8,026)
= $19,747
