Question

Accounts​ Receivable, December​ 31, 2017 $ 20,000​ (debit) Allowance for Bad​ Debts, December​ 31, 2017 prior to adjustment 600​ (debit) Net credit sales for 2017 93,000 Accounts written off as uncollectible during 2017 500 Bad debts expense is estimated by the aging-of-accounts-receivables method. Management estimates that $ 3,150 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts.

Answer 1

AR 20,000

Allowance 3,750

Net AR 16,250

Step-by-step explanation:

AR 20,000

allowance 600 debit (before adjustment)

management estimated that 3,150 of Ar will be uncollectible.

we must adjust allowance to reach this value:

expected 3,150

current 600 debit

adjustment 3,750

AR 20,000

Allowance 3,750

Net AR 16,250