Analysis of accounts receivable and allowance for bad debts-determine ending balances A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here:
|
Accounts receivable
|
$63,000
|
|
|
Less: Allowance for bad debts
|
(9,000)
|
$54,000
|
The company's accounting records revealed the following information for the year ended December 31, 2011:
|
Sales (all on account)
|
$480,000
|
|
Cash collections from customers
|
435,000
|
|
Accounts written off
|
10,500
|
|
Bad debts expense (accrued at 12/31/11)
|
16,500
|
Required:
Calculate the net realizable value of accounts receivable at December 31, 2011, and prepare the appropriate balance sheet presentation for Gibbs Co., as of that point in time.