Percent of Sales MethodAt the end of the current year, Accounts Receivable has abalance...Percent...

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Accounting

Percent of Sales Method
At the end of the current year, Accounts Receivable has abalance of $895,000; Allowance for Doubtful Accounts has a creditbalance of $8,000; and sales for the year total $4,030,000. Baddebt expense is estimated at 1/4 of 1% of sales.
1. Determine the amount of the adjusting entry for uncollectibleaccounts. $
2. Determine the adjusted balances of Accounts Receivable,Allowance for Doubtful Accounts, and Bad Debt Expense. AccountsReceivable $ Allowance for Doubtful Accounts $ Bad Debt Expense$
3. Determine the net realizable value of accounts receivable.$

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All working forms part of the answer
Requirement 1

A	Sales	$ 4,030,000.00
B = A x 1%	1% of sale	$ 40,300.00
C = B x 1/4	1/4 of above = Bad Debt Expense	$ 10,075.00 = ANSWER

--Adjustment entry [for understanding purpose]

	Debit	Credit
Bad Debt Expense	$ 10,075.00
Allowance for Doubtful Accounts		$ 10,075.00

Requirement 2

	Accounts receivables	Allowance for Doubtful Accounts	Bad Debt Expenses
Unadjusted balance	$ 895,000.00	$ 8,000.00	$ -
Adjustment for Bad Debt Expense	$ -	$ 10,075.00	$ 10,075.00
Adjusted Balances for each = ANSWER	$ 895,000.00	$ 18,075.00	$ 10,075.00
Adjusted Balances for each = ANSWER	Debit	Credit	Debit

Requirement 3

Accounts receivables, gross	$ 895,000.00
Less: Allowance for Doubtful Accounts	$ 18,075.00
Net Realizable Value of Accounts receivables	$ 876,925.00

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In: AccountingPercent of Sales MethodAt the end of the current year, Accounts Receivable has abalance...Percent of Sales MethodAt the end of the current year, Accounts Receivable has abalance of $895,000; Allowance for Doubtful Accounts has a creditbalance of $8,000; and sales for the year total $4,030,000. Baddebt expense is estimated at 1/4 of 1% of sales.1. Determine the amount of the adjusting entry for uncollectibleaccounts. $2. Determine the adjusted balances of Accounts Receivable,Allowance for Doubtful Accounts, and Bad Debt Expense. AccountsReceivable $ Allowance for Doubtful Accounts $ Bad Debt Expense$3. Determine the net realizable value of accounts receivable.$