Answer: See explanation
Step-by-step explanation:
Firstly, we need to calculate the amount of bad debt. This will be:
= Credit sales × Bad debt expense
= $1900000 × 2%
= $38000
Also, the adjusted balance of allowance account will be the addition of the uadjusted balance of Allowance account and the bad debt expense which will be:
= $21,400 + $38000
= $59,400.00
Then, the balance sheet will be:
Accounts receivables = $300,000
Less: Allowance for Doubtful Accounts = $59,400
Net Realizable value of Accounts receivables = $240,600