Percent of sales method At the end of the current year Accounts Receivable has a balance of 450 000 Allowance for Doubtful

Question

Percent of sales method At the end of the current year Accounts Receivable has a balance of 450 000 Allowance for Doubtful Accounts has a credit balance of 4 000 and sales for the year total 2 030 000 Bad debt expense is estimated at 1 4 of 1 of sales a Determine the amount of the adjusting entry for uncollectible accounts 5 075 V b Determine the adjusted balances of Accounts Receivable Allowance for Doubtful Accounts and Bad Debt Expense Accounts Receivable 450 000 V Allowance for Doubtful Accounts Bad Debt Expense c Determine the net realizable value of accounts receivable Feedback X 5 075 Check My Work a Remember that since accounts receivable are created by credit sales uncollectible accounts can be estimated as a percent of credit sales If the portion of credit sales to sales is relatively constant the percent may be applied to total sales b Under the percent of sales method the amount of the adjustment is the amount estimated for Bad Debt Expense c Remember that net realizable value is the amount that is expected to be collected or realized

Kunduz · Accepted Answer

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