Use the solution to exercise S4-8 to answer these questions about Environmental Products Inc. for 2020.

1. Start with Accounts Receivable's beginning balance \((\$ 80,000)\) and then post to the Accounts Receivable I-account. How much do Environmental Products's customers owe the company at December 31, 2020?

2. Start with the Allowance account's beginning credit balance \((\$ 17,500)\) and then post to the Allowance for Uncollectible Accounts T-account. How much of the receivables at December 31, 2020, does the company expect not to collect?

3. At December 31, 2020, what is the net realizable value of the company's accounts receivable?

Exercises 4-8

This exercise continues the situation of exercise S4-7, in which Environmental Products ended the year 2019 with accounts receivable of \(\$ 80,000\) and an allowance for uncollectible accounts of \(\$ 17,500\). During 2020, Environmental Products completed the following transactions:

1. Credit sales, \(\$ 1,000,000\)

2. Collections on account, \(\$ 880,000\)

3. Write-offs of un collectibles, \(\$ 16,000\)

4. Bad debt expense, \(\$ 15,000\)

Journalize the 2020 transactions for Environmental Products. Explanations are not required.

Exercise 4-7

During its first year of operations, Environmental Products Inc. had sales of \(\$ 875,000\), all on account. Industry experience suggests that Environmental Products's bad debt expense will be \(\$ 17,500\). At December 31, 2019, Environmental Products's accounts receivable total \(\$ 80,000\). The company uses the allowance method to account for uncollectibles.
1. Make Environmental Products's journal entry for bad debt expense.
2. Show how Environmental Products could report accounts receivable on its balance sheet at December 31, 2019, by disclosing the allowance for uncollectible accounts.