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Handout Problem - CHAPTER 5 You have the following information from the records of Trying to Get This, Corp.: January 1, 2019 December 31, 2019 Accounts receivable $40,000 $60,000 Allowance for bad debts before the end of year adjusting entry Cash sales for the year $100,000 Credit sales for the year $300,000 200* 5,000 WILLIAM For the current year. Trying to Get This. Corp. estimates that 1% of their credit sales will become uncollectible (bad debts). 1. What is the dollar amount of bad debts actually written off during 2019? 2. What is the dollar amount of Bad Debt Expense they would be show on the Income Statement for the year ended 2019: 3. How does the adjustment amount for expected Bad Debts effect Net Income for 2019? (State whether it will increase or decrease Net Income and the dollar amount) 4. What is the balance in the Allowance for Bad Debts account on 12/31/19. after the necessary adjustment for the future bad debts? 5. What is the amount of net Accounts Receivable that would be reported on the balance sheet for 12/31/19? 6. What is the total amount of cash received by Trying to Get This (HINT: include the collection of accounts receivable) for 2019? 7. Assume Trying to Get This, Corp. wrote off a bad debt for $500 on January 4, 2020. How would this transaction: A. Effect net income for 2020? B. What would be the net realizable value of Accounts Receivable after the write off of the $500 bad debt on January 4, 2020? 45