Problem:
A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here:
Accounts receivable $ 20,700
Less: Allowance for bad debts (3,500) $ 17,200
The company's accounting records revealed the following information for the year ended December 31, 2011:
Sales (all on account) $ 166,000
Cash collections from customers 152,000
Accounts written off 2,500
Bad debts expense (accrued at 12/31/11) 5,900
Required:
Calculate the net realizable value of accounts receivable at December 31, 2011, and allowance for bad debts for Gibbs Co., as of that point in time. (Hint: Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts.) (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)
At December 31, 2011:
Accounts receivable $ __________
Less: Allowance for bad debts _______ $________