Prior to the year-end adjustment to record bad debt expense for2014 the general ledger of Muntjac Company included the followingaccounts and balances:
Allowance for Doubtful Accounts
$ 8,000
Bad Debt Expense
0
Accounts Receivable
75,000
Cash collections on accounts receivable during 2014 amounted to$250,000. Sales revenue during 2014 amounted to $600,000, of which50% was on credit, and it was estimated that 2% of these creditsales made in 2014 would ultimately become uncollectible.
Required:
A. Calculate the bad debt expense for 2014.
B. Determine the adjusted 2014 year-end balance of the allowancefor doubtful accounts.
C. Determine the net realizable value of accounts receivable forthe December 31, 2014 balance sheet.
You must include your calculations.
Prior to the year-end adjustment to record bad debt expense for2014 the general ledger of Muntjac Company included the followingaccounts and balances:
Allowance for Doubtful Accounts | $ 8,000 |
Bad Debt Expense | 0 |
Accounts Receivable | 75,000 |
Cash collections on accounts receivable during 2014 amounted to$250,000. Sales revenue during 2014 amounted to $600,000, of which50% was on credit, and it was estimated that 2% of these creditsales made in 2014 would ultimately become uncollectible.
Required:
A. Calculate the bad debt expense for 2014.
B. Determine the adjusted 2014 year-end balance of the allowancefor doubtful accounts.
C. Determine the net realizable value of accounts receivable forthe December 31, 2014 balance sheet.
You must include your calculations.
