ACC Tax ch 13 The Manda Panda Company uses the allowance met

ACC Tax ch 13

The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2016, the allowance account had a credit balance of $5,809. Credit sales for 2016 totaled $447,651 and the year-end accounts receivable balance was $44,679. During this year, $6,381 in receivables were determined to be uncollectible and were written off. Manda Panda anticipates that 1% of all credit sales will ultimately become uncollectible.

What is the net realizable value Manda Panda should report in its 2016 balance sheet?_________

Solution

Balance Sheet: Accounts receivable 44,679 Allowance for uncollectible accounts 3905 Net realizable value 40,774 Allowance for uncollectible accounts Beg Balance 5809 Write-off of bad debts 6381 Bad debt Expense 4477 Bal fig 3905 10286 10286