Reference no: EM131759301

Question: The following balances relate to Smith Company:

Credit Sales         $ 1,520,000

ADA (1/1/15)       $ 7,300 (credit)

AR (1/1/15)         $ 56,000

A- An account with a balance of $1,200, previously written off, is collected during 2015. Furthermore, $850 in the accounts were written off in 2015 as uncollectible. Annual bad debts are estimated to be 5% of credit sales. Show the year-end adjusting entries and determine the balance in the Allowance for Doubtful Accounts at December 31, 2015.

B- At December 31, (before adjusting and closing the accounts) the allowance for doubtful accounts of Wilson Corp showed a debit balance of $9,525. An aging of the accounts receivable indicated that the amount expected to be uncollectible was $4,100. The accounts receivable balance at Dec. 31 was $90,000. Show the year-end adjusting entry for bad debt expense and determine what the net realizable value of the accounts receivables at year end.