Problem 7 (5 Points) Before year-end adjusting entries, Dunn Company\'s account
ID: 2565484 • Letter: P
Question
Problem 7 (5 Points) Before year-end adjusting entries, Dunn Company's account balances a 2017, for accounts le and the related allowance for uncollectible accounts were respectively. An aging of accounts receivable indicated that 31 receivables are expected to be uncollectible. The net MUST show your work realizable value of accounts receivable after adjustment is, You to get credit. Problem 8 (5 Points) The following information is available for Murphy Company Allowance for doubtful accounts at December 31,2016 Credit sales during 2017 Accounts receivable deemed worthless and written off during 2017 $24,000 1,200,000 27,000 As a result of a review and aging of accounts receivable in early January 2018, it has been determined that an allowance for doubtful accounts of $16,000 is needed at December 31, 2017. Prepare the journal entry that Murphy should record as "bad debt expense" for the year ended December 31, 2017? You MUST show your work to get creditExplanation / Answer
7. Net realizable value of accounts receivable: $1,375,000
The net realizable value of accounts receivable is the value net of the allowance for uncollectible accounts which is $125000 as expected and after adjustment.
8. Journal entry:
Calculations:
After write-off the allowance for doubtful accounts has a debit balance of $3000 while the ending balance required is credit balance of $16000. Hence debit to bad debt expense and credit to allowance is given for $19000 to get a credit in allowance account of $16000.
Accounts receivable 1500000 Allowance for uncollectible accounts -125000 Net realizable value of Accounts receivable 1375000