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Unformatted text preview: E7-8 Tom Grubach At the end of 2010 Sorter Co. has accounts receivable of $900,000 and an allowance for doubtful accounts of $40,000. On January 16th, 2011, Sorter Co. determined that its receivable from Ordones Co. of 8,000 will not be collected, and management authorized its write-off. A) Preoare a journal entry for Sorter Co. to write off the Ordonez receivable Dr. Allowance for doubtful accounts Accounts Receivable 8000 8000 Cr. B) What is the net realizable value of Sorter Co.'s accounts receivable before the write-off of the Ordonez receivable? 900,0 Accounts Receivable - Allowance for doubtful accounts 00 40,0 00 860,0 00 C) What is the net realizable value of Sorter Co.'s accounts receivable after the write off of the Ordonez receivable? Accounts Receivable - write off - (Allowance - write off) 892,0 00 32,0 00 860,0 00 1 2 ...
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- Fall '10
- Generally Accepted Accounting Principles, Sorter Co.