Part 1: Accounts Receivables and Allowance Method 1) Orion Co. is a large wholes
ID: 2547483 • Letter: P
Question
Part 1: Accounts Receivables and Allowance Method 1) Orion Co. is a large wholesaler of blankets. At the end of 2017, the company's controller estimates 5% of the $850,000 in Accounts Receivable will be uncollectible a. Write the journal entry to record Bad Debt Expense for the period if the Allowance for Doubtful Accounts has a credit balance of $10,200 before this adjusting entry is posted: 12/31/17 b. How does the posting of this journal entry affect the accounting equation? c. What is the Net Realizable Value of Accounts Receivable reported in Orion Co.'s balance sheet as of Dec. 31, 2017?Explanation / Answer
a) Journal entry
b) Accounting equation :
c) Account receivable = 850000
Allowance for doubtful accounts = (10200+32300) = 42500
Net realizable value = (850000-42500) = 807500
Date Accounts & explanation debit credit Bad debt expense (850000*5%-10200) 32300 Allowance for doubtful accounts 32300