Percent of Sales Method
At the end of the current year, Accounts Receivable has a balance of $2,150,000; Allowance for Doubtful Accounts has a debit balance of $10,500; and sales for the year total $51,850,000. Bad Debt Expense is estimated at 1/4 of 1% of sales.
a. Determine the amount of the adjusting entry for uncollectible accounts.
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
Allowance for Doubtful Accounts$
Bad Debt Expense$
c. Determine the net realizable value of accounts receivable.