You are auditing the receivables section for one of your clients The company provides you with its schedule of accounts receivable categorized by age and expected default rate, as follows Based on the above information, the companys accounting clerk recorded $10,800 as bad debts expense You collect...

Completing the aging schedule results in the amount of 10800 ...

You are auditing the receivables section for one of your clients. The company provides you with its

Question:

You are auditing the receivables section for one of your clients. The company provides you with its schedule of categorized by age and expected default rate, as follows:

Based on the above information, the company€™s accounting clerk recorded $10,800 as bad debts expense. You collect additional relevant information as follows:
Allowance for doubtful accounts (ADA), Jan. 1, 2012€¦€¦€¦€¦€¦€¦$12,000
Accounts written off during 2012€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦.$7,000
Required:
Determine what adjustment, if any, is required to correct the company€™s accounts relating to receivables or bad debts. Provide the journal entry' or entries accordingly.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...