You are the accountant for the I love Accounting company. You have to perform the month end procedures for the Accounts Receivable and Allowance for Doubtful Account.
Given data:
The beginning balance in Accounts Receivable was $12,000- Debit
The beginning balance in Allowance for Doubtful Accounts was $1,000- Credit
During the period $8,500 new credit sales were made. There were $9,700 in cash collections on charge accounts.
An account that was previously written off was collected, the amount was $500.
The companies policy for aged receivables is:
Current portion 0%
31 to 60 10%
61 to 90 40%
Over 90 80%
When you print the month end Accounts receivable aging it shows the following partial data:
Amounts 31 to 60 61 to 90 over 90
2500 900 606
Question 1- show the adjusting entry to show the receipt of the previously written off account?
Question 2- what will the Bad Debt Expense be the month?
Question 3- what is the new balance be in the allowance for Doubtful Accounts?
Question 4- what is the ending balance for Accounts Receivable?
Question 5- what will be the cash realizable value for Accounts Receivable?