Manilow Company has asked you to help create year-end journal entries. They are currently reporting $555,000.00 in accounts receivable and they have sent you a download of their accounts receivable subsidiary ledger for your review, along with the A/R general ledger and the GL print-out of the Allowance Account.
Calculate the following items:
- Using the attached spreadsheet, complete the:
- Net Realizable Value of Accounts Receivable using the aging analysis.
- Allowance for doubtful accounts amount.
- Bad debt expense.
- Manilow Company also wants to know how close they would be to the same result if they used the % of sales method monthly.
- Use Total credit sales for the year = $4,800,000 and estimated bad debt expense = 0.5% of sales.
- Calculate the % of sales you would tell Manilow Company to use to come close to the Allowance for doubtful accounts total from 1(a).