On January 1, 2018, Willett Company's account balances for Accounts Receivable and the related Allowance for Uncollectible Accounts were $3,600,000 and $90,000, respectively. During the year, sales revenue totaled $40 million, of which 70% were credit sales and the remainder were cash sales. Altogether, cash collections from all customers amounted to $30 million. Also, write-offs of accounts deemed to be uncollectible totaled $250,000. At the end of the year, an analysis of aged accounts receivable indicated that 2% of total gross receivables may be uncollectible.
Required:
Determine the amount of bad debt expense for the year and net realizable value of receivables at the end of the year.

Question

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The Answer of On January 1, 2018, Willett Company's account balances for Accounts Receivable and the related Allowance for Uncollectible Accounts were $3,600,000 and $90,000, respectively. During the year, sales revenue totaled $40 million, of which 70% were credit sales and the remainder were cash sales. Altogether, cash collections from all customers amounted to $30 million. Also, write-offs of accounts deemed to be uncollectible totaled $250,000. At the end of the year, an analysis of aged accounts receivable indicated that 2% of total gross receivables may be uncollectible.
Required:
Determine the amount of bad debt expense for the year and net realizable value of receivables at the end of the year.

On January 1, 2018, Willett Company's Account Balances for Accounts