Abundant Returns
This Company Sells Its Merchandise Only on Credit

Abundant Returns
This company sells its merchandise only on credit.The following data are available at December 31,2012.
$\begin{array}{ll}\text {Sales } &\$ 411,000 \\\text { Sales returns and allowances} &12,000 \\\text { Account s receivable at January 1,2012 } &89,000 \\\text { Allowance for doubtfil accounts at January 1, 2012 } &4,100 \\\text { Cash collections during 2012 } &385,100 \\\text {Accountswritten off as uncollected during 2012 } &3,600\end{array}$
-Refer to Abundant Returns.The firm estimates that bad debts could be 2% of net sales.
A) What amount will the company recognize as bad debts expense for the year?
B) Assume that the company has a balence of Accounts Receivable of $\$ 108,900$ , and an Allowance for Doubtful Accounts of $\$ 820$ . What will be the net realizable value once the adjustment from (Part $A)$ is made?