At the End of the Current Year, Accounts Receivable Has

question 95

Essay

At the end of the current year, Accounts Receivable has a balance of $900,000, the Allowance for Uncollectible Accounts has a debit balance of $1,000 and net credit sales for the year are $3,000,000. The company uses the percent-of-sales method. Its credit department has determined that uncollectible accounts will amount to 2% of net credit sales.
Required:
1. Prepare the year- end adjusting journal entry. Omit the explanation.
2. Determine the adjusted balances for Accounts Receivable and the Allowance for Uncollectible Accounts.
3. Determine the net realizable value of accounts receivable at the end of the year.

---

Definitions:

Homeostasis

The self-regulating process by which biological systems maintain stability while adjusting to conditions that are optimal for survival.

Set Point

A concept suggesting that the body regulates its weight and energy levels around a physiologically predetermined point, influencing appetite and metabolism.

Basal Metabolic Rate

The pace at which energy is expended by the body during rest to preserve critical activities such as respiration and temperature regulation.

Unfamiliar Foods

Food items that are not known or recognized by an individual, often leading to hesitancy or curiosity in tasting.