At the end of the fiscal year 2012, the Turner Corporation showed the following selected account balances:
Sales (all on credit) $500,000
Accounts Receivable 1,200,000
Allowance for Doubtful Accounts 55,000
Required: 1. Assume the company estimates that 2% of all credit sales will not be collected.
a. Prepare the proper journal entry to recognize the bad debts expense involved.
b. Present the balances in Accounts Receivable and Allowance for Doubtful Accounts as they would appear on the balance sheet. Also show the net realizable Accounts Receivable.