Tuesday 23 October 2012

A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here:


A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here:

 






  Accounts receivable
$
21,800



  Less: Allowance for bad debts

(2,300
)
$
19,500  


The company's accounting records revealed the following information for the year ended December 31, 2011:
 



  Sales (all on account)
$
155,000  
  Cash collections from customers

141,000  
  Accounts written off

2,800  
  Bad debts expense (accrued at 12/31/11)

5,300  


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

$  


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