Empire Records Company has credit sales of $375,000 and accounts receivable of $50,000 on December 31, 2019. Management estimates that 5% of its credit sales will be uncollectible. The company's unadjusted trial balance shows a $200 credit balance in Allowance for Doubtful Accounts. 1.) Prepare the adjusting entry to record estimated uncollectible accounts at December 31, 2019. Accounts Date Debit Credit 2.) Prepare the T-account to show the ending balance for the Allowance for Doubtful Accounts account. 3.) What is the net realizable value that will appear on the balance sheet at Dec. 31st? $
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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