I am having trouble understanding this...
At the end of 2006, Endrun Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $54,000. On January 24, 2007, the company learns that its receivable from Oswego Inc. is not collectible, and management authorizes a write-off of $6,400.
(a) Prepare the journal entry to record the write-off.
(b) What is the cash realizable value of the accounts receivable (1) before the write-off and
(2) After the write-off?
1. Journal entry to record write off:
Bad debts a/c Dr 6400
To provision for doubtful ...
The answer contains journal entries for bad debts,provision for bad debts and finding out the cash realisable value of accounts receivable.