At the End of the Current Year, Accounts Receivable Has

question 173

Essay

At the end of the current year, Accounts Receivable has a balance of $750,000; Allowance for Doubtful Accounts has a debit balance of $6,200; and sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of sales.
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Determine (a) the amount of the adjusting entry for bad debt expense; (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:

Amylase

An enzyme that catalyzes the breakdown of starches into sugars, playing a critical role in the digestive process.

Trypsin

An enzyme produced in the pancreas that plays a key role in the digestive process by breaking down proteins into smaller peptides in the small intestine.

Phospholipid

A type of lipid molecule that is a major component of all cell membranes, known for its polar head and nonpolar tail structure.

Cell Membranes

Semi-permeable barriers that enclose the cytoplasm of a cell and regulate the passage of substances.