Southwest Pediatrics has the following balances on December

Southwest Pediatrics has the following balances on December 31, 2018, before any adjustment: Accounts Receivable = $121,000; Allowance for Uncollectible Accounts = $2,100 (debit). On December 31, 2018, Southwest estimates uncollectible accounts to be 20% of accounts receivable.

Required:

1. Record the adjustment for uncollectible accounts on December 31, 2018. (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.)

Journal entry worksheet

Record the adjustment entry for Uncollectible Accounts.

Note: Enter debits before credits.

2. Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.

3. Calculate the net realizable value of accounts receivable.

Solution

Date

General Journal

Debit

Credit

Dec 31,2018

Bad debt Expense

26300

Allowance for uncollectible accounts

26300

(121000 * 20% + 2100 = 26300)

(2)

Bad debt expense

26300

Allowance for uncollectible accounts (26300 – 2100)

24200

(3)

Total accounts receivable

121000

(-) Allowance for uncollectible accounts

24200

Net realizable value

96800