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Recording Bad Debts At the end of 2010 Sorter Company has accounts receivable of $900,000 and an allowance for doubtful accounts of $40,000. On January 16, 2011, Sorter Company determined that its receivable from Ordonez Company of $8,000 will not be collected, and management authorized its prepare-off.

(a) Prepare the journal entry for Sorter Company to prepare off the Ordonez receivable.

(b) What is the net realizable value of Sorter Company's accounts receivable before the prepare-off of the Ordonez receivable?

(c) What is the net realizable value of Sorter Company's accounts receivable after the prepare-off of the Ordonez receivable?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M979128

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