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    Estimate Bad Debt Write-off and Net Accounts Receivable

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    At the end of 2008, Tindal Company has accounts receivable of $1,200,000 and an
    allowance for doubtful accounts of $60,000. On February 28, 2009, Tindal Company
    determined that the receivable from Fendi Company of $8,000 will not be collected,
    and management authorized its write-off.

    Prepare the journal entry for Tindal Company to write off the Fendi receivable.

    DR CR
    Bad debt expense 52,000
    Allowance for doubtful accounts 52,000

    What is the net realizable value of the Tindal Company's account receivable
    before the write off the Fendi receivable?

    Accounts receivable $1,200,000
    Amount estimated to be uncollectable (60,000)
    Net Realizable Value $1,140,000

    What is the net realizable value of the Tindal Company's accounts receivable
    after the write off of the Fendi receivable?

    Accounts receivable $1,200,000
    Amount estimated to be uncollectable
    Net Realizable Value $-

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    https://brainmass.com/business/auditing/estimate-bad-debt-write-off-net-accounts-receivable-340652

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    Under the allowance method, we debit the allowance account and credit the accounts receivable account to write off a ...

    Solution Summary

    Given a company using the allowance method of bad debts, this solution illustrates the journal entry to be recorded and the balance sheet presentation of a bad debt write-off.

    $2.49

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