Q # 1: On 12/31/2023 Tara's Treasures has the following Balances:

Accounts Receivable $895,000 (Debit)

Allowance for Uncollectible Accounts $2,500 (Credit)

Net Sales $1,250,000 (Credit)

Tara wants to calculate what her Bad Debt Expense will be for 2023:

Method I: % of Net Sales: Tara estimates that 5% of her Net Sales will not be paid.

Required:

1. Record the adjustment for Bad Debt Expense in the Journal
2. What is the Realizable Value after the entry has been recorded and posted to the Ledgers?

Method II: % of Accounts Receivable: Tara Estimates that 8% of the Account Receivable Balances will not be paid.

Required:

1. Record the Adjustment for Bad Debt Expense
2. What is the Realizable Value after the entry is recorded and posted to the Ledgers?

Q # 2: Professor Crawford's Bakery Corp has prepared the following AGING Schedule for her Accounts Receivable:

Customer	Total Bal	1-30 days	31-60 days	61-90 days	Over 90 days
Keira	$100,000	$75,000	$10,000	$15,000
Noelle	$200,000	$100,000	$100,000
Tara	$85,000			$75,000	$10,000
Renata	$315,000	$250,000	$55,000		$10,000
Total	$700,000	$425,000	$165,000	$90,000	$20,000

Est % May Not Pay: 2%. 8% 15% 22%

As Professor Crawford's Schedule reports...her Account Receivable Total Balance is $700,000 and she also has a $4,000 CREDIT Balance in her Allowance for UNCOLLECTIBLE ACCOUNTS....

Required:

1. What would be the adjusting entry she would need to record based on the Aging Schedule she provided....
2. And after the entry....what would be the Realizable Value of her Accounts Receivable?

Answer rating: 100% (QA)

Q 1 Method I of Net Sales 1 Record the adjustment for Bad Debt Expense in the Journal Bad Debt Expen... View the full answer