Prior to the Year-End Adjustment to Record Bad Debt Expense

question 34

Essay

Prior to the year-end adjustment to record bad debt expense for 2016 the general ledger of Stickler Company included the following accounts and balances: Cash collections on accounts receivable during 2016 amounted to $450,000. Sales revenue during 2016 amounted to $800,000, of which 75% was on credit, and it was estimated that 2% of these credit sales made in 2016 would ultimately become uncollectible.
Required:
A.Calculate the bad debt expense for 2016.
B.Determine the adjusted 2016 year-end balance of the allowance for doubtful accounts.
C.Determine the net realizable value of accounts receivable for the December 31, 2016 balance sheet.

---

Definitions:

Arthroscope

a surgical instrument used to visualize, diagnose, and treat problems inside a joint.

-Scope

A suffix used in the names of instruments or devices for viewing or examining, such as a microscope.

Hematopoiesis

The process of creating new blood cells in the body, occurring predominantly in the bone marrow.

Skeletal System

The framework of bones and other connective tissues which provide support, movement, protection, and mineral storage for the body.