Assen Company's general ledger at December 31, 2014, the end of the current year, shows Accounts Receivable $210,000 and Allowance for Doubtful Accounts $1,300 (credit). Uncollectible accounts are estimated to be 10% of accounts receivable.
Instructions
(a) Calculate the net realizable value of the accounts receivable.
(b) Record the adjusting journal entry at December 31, 2014.
(c) Assume instead that the Allowance for Doubtful Accounts had a debit balance of $2,800 at December 31, 2014. What is the net realizable value of the accounts receivable at December 31, 2014, and what is bad debt expense for 2014?