Alpha Company's Accounts Receivable and Allowance for Doubtful Accounts Balances

question 1

Essay

Alpha Company's accounts receivable and allowance for doubtful accounts balances were $100,000 and $14,000 (credit)respectively,at the beginning of Year 2.During Year 2,a customer defaults on a $12,000 balance related to goods purchased during Year 1.By the end of the year,the company had made credit sales of $2,400,000 and collected $2,200,000 on account.It now estimates that 1% of its credit sales will default.
A) Prepare the journal entry to write-off the bad debt.
B) Prepare the adjusting entry to record bad debt expense for Year 1.
C) What is the net accounts receivable balance at the end of the year?

Evaluate the impact of operating expenses on pricing and profit margins.

Apply the concepts of trade discount and net cost calculation in various scenarios.

Determine the profit or loss realized at different selling prices.

Analyze the relationship between selling price, cost price, and profit rate.

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Definitions:

First-Order Model

A mathematical or statistical model that represents linear relationships between variables using first-degree equations.

Unit Increase

It refers to the increment by a single unit in the independent variable and observing the effect on the dependent variable.

Holding Constant

A method in analysis where certain variables are kept unchanged to isolate the effect of varying other variables.

Simple Linear Regression

A mathematical approach that establishes a connection between a dependent variable and a single independent variable through the application of a linear equation to the collected data.