Business, 07.11.2019 02:31 asauerha

Determine the expected net realizable value of the accounts receivable as of december 31 (after all of the adjustments and the adjusting entry). $ 4. assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables the adjusting entry on december 31 had been based on an estimated expense of ½ of 1% of the sales of $15,800,000 for the year, determine the following: a. bad debt expense for the year. $ b. balance in the allowance account after the adjustment of december 31. $ c. expected net realizable value of the accounts receivable as of december 31 (after all of the adjustments and the adjusting entry).

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Answer from: LuluMathLover101

the adjusting entry on December 31 had been based on an estimated expense of ½ of 1% of the sales of $15,800,000

Dr Bad Debt Expense$ 79,000

Cr Allowance for Uncollectible Accounts$ 79,000

b. Balance in the allowance account after the adjustment of December 31.

Cr Allowance for Doubtful Accounts$ 79,000

c. Expected net realizable value of the accounts receivable as of December 31

Net realizable value of the accounts receivable$ 15.721.000

Explanation:

c. Expected net realizable value of the accounts receivable as of December 31

Net realizable value of the accounts receivable$ 15,721,000

As the company does not have a balance of accounts receivable, we assume that the net realizable value it's the net of total sales.

If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % estimated of accounts receivables as CREDIT.

Bad accounts are those credits granted by the company and there is no possibility of being charged.

"When customers buy products on credits but the company cannot collect the debt, then it's necessary to cancel the unpaid invoice as uncollectible."

One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets

The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.

When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)

At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit) with accounts receivable (credit), with this we are recognizing the bad credit of the company.

Answer from: Quest

24 years, i believe is the correct answer.

Answer from: Quest

u = 30

continuing your method

$\frac{1}{10}$ = $\frac{1}{u}$ + $\frac{1}{15}$

subtract $\frac{1}{15}$ from both sides

$\frac{1}{u}$ = $\frac{1}{10}$ - $\frac{1}{15}$ thus

$\frac{1}{u}$ = $\frac{3}{30}$ - $\frac{2}{30}$

$\frac{1}{u}$ = $\frac{1}{30}$ ⇒ u = 30

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