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12/31/06 Accounts receivable $1,050,000 Allowance (90,000) Cash realizable value $960,000 During 2007 sales o?
Accounts receivable $1,050,000
Allowance (90,000)
Cash realizable value $960,000
During 2007 sales on account were $290,000 and collections on account were $172,000. Also during 2007 the company wrote off $16,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $108,000.
Bad debts expense for 2007 is
a. $34,000
b. $18,000
c. $108,000
d. $2,000
2 Answers
- Anonymous1 decade agoFavorite Answer
a. 34,000
You add a Credit for 18,000 to Allowance for bad debts and a debit to Bad Debts acct for the same 18,000
You already wrote of 16,000, therefore your bad debts for 2007 is 16,000 plus the accrual
18,000 making the accrual 108,000.
Bad debt for 2007 is 34,000.
- 1 decade ago
A. Begin balance of 90,000 less the write-off of 16,000 is 74,000. If the ending balance is 108,000 so the adjustment for bad debt expense would be 34,000
