Percent of Sales Method

Question

At the end of the current year, Accounts Receivable has a balance of $4,375,000; Allowance for Doubtful Accounts has a debit balance of $21,300; and sales for the year total $102,480,000. Bad debt expense is estimated at 1/4 of 1% of sales.

a. Determine the amount of the adjusting entry for uncollectible accounts.
$
256,200

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

Accounts Receivable $
4,375,000
Allowance for Doubtful Accounts $
21,300 (wrong)
Bad Debt Expense $
256,200
c. Determine the net realizable value of accounts receivable.
$(wrong)

Answer 1

4,353,700