Problem 5.

30

Analysis of accounts receivable and allowance for bad debts—determine ending balances  A portion of the current assets section of t

Accounts receivable
Less: Allowance for bad debts

The company’s accounting records revealed the following information for the year ended December 31, 2020:

Sales (all on account)

Cash collections from customers
Accounts written off
Bad debts expense (accrued at 12/31/20)

Required:
Calculate the net realizable value of accounts receivable at December 31, 2020, and prepare the appropriate balance sheet presentation for G

Less: Allowance For bad Debts

Bad debts expense (accrued on 12/31/20)
Accounts written off
Allowance for bad debt accounts

Accts Rec Beginning Balance

Credit Sales
Cash
Accounts Written Off
Total

Accounts Receivable
Less: Allowance for Bad Debts
Net Realizeable Value
 $425,000 
 (18,000) $407,000

$2,600,000
2,375,000
30,000
41,000

Accts Rec Beginning Balance $425,000.00

$18,000.00 Sales (All on Account) $2,600,000.00
$41,000.00 Cash collections from Customers -$2,375,000.00
-$30,000.00 Accounts written off -$30,000.00
$29,000.00 Accounts Recievable $620,000.00

Allowance for Bad Debts

Debit Credit
$425,000.00 Accounts Written Off
$2,600,000.00 Beginning Balance
$2,375,000.00 Bad Debt Expense
$30,000.00 Total
$620,000.00

$620,000.00
-$29,000.00
$591,000.00
Allowance for Bad Debts
Debit Credit
$30,000.00
$18,000.00
$41,000.00
$29,000.00