Quiz+4+Solutions - Name _ Quiz No. 4 ACG 3482C Section _...

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Name _____________________ Quiz No. 4 ACG 3482C Section ______________________ Fall 2010 1. ABC Company is in its first year of business. This year, they had credit sales of $5,000,000 and cash collections of $3,200,000. They determine that 5% of credit sales will be uncollectible. What is the journal entry for bad debt expense and what is the Net Realizable Value of Accounts Receivable? Bad debt expense 250,000 Allowance for doubtful accounts 250,000 NRV = 5,000,000 – 3,200,000 – 250,000 = $1,550,000 2. XYZ Company is in its second year of business. This year, they had credit sales of $6,000,000 and cash collections of $4,800,000. At the end of the year, the balance in Allowance for Doubtful Accounts is $32,000. They determine that 4% of ending accounts receivable will be uncollectible. What is the journal entry for bad debt expense if beginning Accounts Receivable was $0 and what is the Net Realizable Value of Accounts Receivable? 6,000,000 – 4,800,000 = 1,200,000 * .04 = 48,000 = ending balance in ADA
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Quiz+4+Solutions - Name _ Quiz No. 4 ACG 3482C Section _...

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