For its fiscal year ended December 31, 2023, Fruitful Products had credit sales of $750,000. At year
Question:
For its fiscal year ended December 31, 2023, Fruitful Products had credit sales of $750,000. At year end, the unadjusted trial balance shows a debit balance of $1,800 in the Allowance for Doubtful Accounts (AFDA), and $140,000 in Accounts Receivable. The credit manager prepared an aging schedule of accounts receivable and estimates that $5,155 will prove to be uncollectible. On March 4, 2024, the credit manager authorizes a write off of the $2,862 balance owed by Sand Beach. Instructions
Credit sales: $750,000
Unadjusted AFDA at year end: $1,800
Accounts Receivable at year end: $140,000
Estimated uncollectible amount from aging schedule: $5,155
(a)Prepare the adjusting entry to record the estimated bad debt expenses for 2023.
(b) Show the statement of financial position presentation of accounts receivable at December 31, 2023.
(c) On March 4, 2024, before the write off, assume the balance of Accounts Receivable account is $175,000 and the balance of Allowance for Doubtful Accounts is a credit of $4,500. Record the entry to write off the Sand Beach account. Also, show the statement of financial position presentation of accounts receivable before and after the write off.