At the start of the year, Sonoran Park Equipment"s accounts receivable balance was $105,000 and the allowance for hesitant accounts had actually a $1,950 credit. Sonoran"s sales in the existing year were $787,500, 80% of which were on credit. Collections on account in the time of the year were $502,000. Furthermore, Sonoran wrote off $3,000 of uncollectible accounts during the year. It is estimated that 6% of the year finish accounts receivable are intended to be uncollectible.
Using the allowance for poor debts based upon accounts receivable aging technique, recognize the journal entry for the estimate of bad debts. What is Sonoran"s net realizable value of accounts at the end of the year?
Sjust how work-related here:
B. Net Realizable Value
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Raintree Cosmetic Company kind of sells its products to customers on a crmodify basis. An adjusting enattempt for bad debt expense is recorded just at December 31, the companyâs fiscal year-finish. The 2017 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $48,000 $ 522,000 Throughout 2018, crmodify sales were $1,840,000, cash collections from customers $1,920,000, and also $57,000 in accounts receivable were written off. In addition, $4,800 was built up from a customer whose account was written off in 2017. An aging of accounts receivable at December 31, 2018, reveals the following: Percentage of Year-End Percent Period Group Receivables in Group Uncollectible 0â60 days 70 % 5 % 61â90 days 20 15 91â120 days 5 20 Over 120 days 5 40 Required: 1. Prepare summary journal entries to account for the 2018 write-offs and also the repertoire of the receivable formerly created off. 2. Prepare the year-finish adjusting enattempt for bad debts according to each of the following situations: Bad debt price is approximated to be 4% of credit sales for the year. Bad debt expense is approximated by computing net realizable worth of the receivables. The allowance for uncollectible accounts is approximated to be 10% of the year-end balance in accounts receivable. Bad debt expense is estimated by computer net realizable value of the receivables. The allowance for uncollectible accounts is figured out by an aging of accounts receivable.
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3. For cases (a)â(c) in need 2 over, what would be the net amount of accounts receivable reported in the 2018 balance sheet?