Problem: At the end of 2006, Endrun Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $54,000. On January 24, 2007, the company learns that its receivable from Oswego Inc. is not collectible, and management authorizes a write-off of $6,400.
(a) Prepare the journal entry to record the write-off.
(b) What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?
On March 4, 2007, Endrun Co. receives payment of $6,400 in full from Oswego Inc. Prepare the journal entries to record this transaction.