At the close of its first year of operations, on December 31, 2005, the Walker Company had accounts receivable of $250,000, which was net of the related allowance for doubtful accounts. During 2005, the company had charged to bad debt expense of $40,000 and wrote off, as uncollectible, accounts receivable of $10,000.
What should the company report on its balance sheet at December 31, 2005, as accounts receivable before the allowance for doubtful accounts?
Entry for recording bad debts is:-
Bad debt expense 40000
Solution contains calculations of accounts receivable before the allowance for doubtful accounts.