A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here:
Accounts receivable $ 24,100
Less: Allowance for bad debts (2,300) $ 21,800
The company's accounting records revealed the following information for the year ended December 31, 2011:
- Sales (all on account) $ 163,500
- Cash collections from customers 139,000
- Accounts written off 2,800
- Bad debts expense (accrued at 12/31/11) 5,400
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.)
- At December 31, 2011:
- Accounts receivable $
- Less: Allowance for bad debts $ $