CHAPTER 7 3) The Clinton Corporation prepares an aging of its accounts receivabl
ID: 2588285 • Letter: C
Question
CHAPTER 7 3) The Clinton Corporation prepares an aging of its accounts receivable at year-end and reports the following: Assume all relevant accounts have normal balances.] Accounts receivable balance, 12/31 Allowance for uncollectible accounts (12/31, unadjusted balance) As per aging analysis, estimate of accounts expected 2,660,000 87,000 to be uncollectible 235,000 REQUIRED: (a) What amount should be reported as the net realizable value of accounts receivable on the year-end balance sheet? (b) Prepare the appropriate year-end adjusting entry for the bad debt expense.Explanation / Answer
a. Amount to be reported as the net realizable value of accounts receivable on the end of the year balance sheet:
= $ 2,660,000 - $ 235,000 = $ 2,425,000.
b. Adjusting entry :
Date Account Titles Debit Credit $ $ December 31 Bad Debt Expense 148,000 Allowance for Uncollectible Accounts 148,000