# Allowance and Bad Debt Calculations for accounts receivable

Series of unrelated situations below.

1) Spock Company's unadjusted trial balance at Dec 31, 2007, included the following accounts.

Debit Credit
Allowance for doubtful accounts \$4000
Net Sales \$1,500,000

Spock Co. estimates its bad debt expense to be 1.5% of net sales. Determine its bad debt expense for 2007.

2) An Analysis and aging of Scotty Cop. accounts receivable at Dec 31, 2007, disclosed the following.
Amounts estimated to uncollectible \$180,000
accounts receivable \$1,750,000
Allowance for doubtful accounts \$125,000

What is the net realizable value of Scotty's receivables at Dec 31st, 2007?

3) At the end of its first year of operations, Dec 31,2007, Chekov inc. reported the following info.

Accounts receivable, net of allowance for doubtful accounts \$950,000
Customer accounts written off as uncollectible during 2007 \$24,000
Bad Debt expense for 2007 \$84,000

What should be the balance in accounts receivable at Dec 31, 2007, before subtracting the allowance for doubtful accounts?

4) The following accounts were taken from Chappel Inc's trial balance at dec 31, 2007.
DEBIT CREDIT
Net credit sales \$750,000
Allowance for doubtful Accounts \$14,000
Accounts receivable 410,000

If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 07

Solution Summary

Each of the four unrelated problems having to do with a calculation of the allowance for bad debts and/or the bad debt expense are detailed in the solution together with an explanation of the rationale and the calculations for the responses.

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Pat Mitchell, CPA (retired)

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Active since 2006

BBA, University of Alaska
CPA, Ernest & Ernest

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