At the End of the Current Year, Accounts Receivable Has

question 4

Essay

At the end of the current year, Accounts Receivable has a balance of $90,000; Allowance for Doubtful Accounts has a credit balance of $850; and sales for the year total $300,000. Bad debt expense is estimated at 2.5% of sales.​Determine
(a) the amount of the adjusting entry for uncollectible accounts;
(b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and
(c) the net realizable value of accounts receivable.

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Definitions:

Cost Reconciliation Report

A financial document used to compare and reconcile the costs incurred with the costs allocated to products or services, often in process costing systems.

Work in Process Inventory

The cost of unfinished goods in the manufacturing process at a specific point in time.

First-In, First-Out Method

An inventory valuation method where the oldest inventory items are recorded as sold first, leaving the most recently purchased items in inventory.

Equivalent Units

A concept used in cost accounting to express the amount of work done on partially finished goods in terms of fully finished goods, helpful in calculating costs in process costing systems.