Rankine Company estimates its bad debts expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Rankine calculated a total of $9,600 in possible credit losses as of December 31. Accounts Receivable has a balance of $307,200, and the Allowance for Doubtful Accounts has a credit balance of $1,200 before adjustment at December 31 Required:
What is the net amount of accounts receivable that should be included in current assets?

Date  Account titles and Explanation    Debit      Credit

         Bad Debt Expense                         $8,400

                  Allowance for doubtful account            $8,400

                  ($9,600 credit required - $1,200 already existing)

         (To record bad debt expenses)

Particulars                                               Amount

Account receivables                               $307,200

Less: Allowance for doubtful account   $9,600

Net amount of accounts receivable     $297,600

was my answer wrong?

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20