Problem
At the end of the current year, Accounts Receivable has a balance of $700,120 Allowance for Doubtful Accounts has a credit balance of $5,532 and sales for the year total $2,783,000. Bad debt expense is estimated at ½ of 1% of sales.
1. Determine the amount of the adjusting entry for bad debt expense.
2. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
3. Determine the net realizable value of accounts receivable.