At December 31 of the Current Year,Accounts Receivable Has a Balance

question 12

Essay

At December 31 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.

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Definitions:

Rancher

A person who owns or manages a ranch, where livestock such as cattle or sheep are raised for meat or wool.

Production Possibilities

A curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors.

Opportunity Cost

Forgoing possible gains from alternative paths when one path is chosen.

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.