Use the Information That Follows Taken from the Unadjusted Trial

question 9

Essay

Use the information that follows taken from the unadjusted trial balance and aging schedule of Behrend Company on December 31, 2017 to answer the questions below. All sales are on account.
Accounts and related balances at December 31, 2017 before adjustment:
$$\begin{array} { l c c } \hline & \text { Debit } & \text { Credit } \\\hline \text { Accounts receivable } & \$ 47,000 & \\\text { Allowance for doubtful accounts } & & \$ 420 \\\text { Sales (all on account) } & & 400,000 \\\text { Sales returns } &2,000 \end{array}$$
Aging Schedule of Accounts Receivable:
$\begin{array}{l|r|r}\text { Age } & \text { Amount } & \% \text { Uncollectible } \\\hline 0 \text {-30 days } & \$ 15,000 & 2 \% \\30-60 \text { days } & 18,000 & 7 \% \\\text { Over } 60 \text { days } & 14,000 & 13 \%\end{array}$
If Behrend uses the aging schedule of accounts receivable to determine bad debts, determine the following:
A. Bad debt expense for the year ending December 31, 2017
B. Allowance for Doubtful Accounts balance at December 31, 2017
C. Net realizable value of accounts receivable on the 2017 financial statements

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Definitions:

Strict Liability

A legal doctrine that holds an individual or entity responsible for their actions or products, without the plaintiff needing to prove negligence or fault.

Criminal Negligence

A reckless disregard for the safety or lives of others, which is so severe it is considered a criminal offense.

Criminal Recklessness

The act of knowingly engaging in conduct that poses a substantial and unjustifiable risk of harm to others.

Mens Rea

The legal principle referring to the criminal intent or state of mind of an individual committing a crime.