At the end of 2019, Bramble Corp. has accounts receivable of $740,200 and an allowance for doubtful accounts of $69,900. On January 24, 2020, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $6,400 Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?

Question

Brayden Krueger

Business

18 May, 04:56

At the end of 2019, Bramble Corp. has accounts receivable of $740,200 and an allowance for doubtful accounts of $69,900. On January 24, 2020, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $6,400 Prepare the journal entry to record the write-off. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off?

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Britney Grimes · Answer 1

The journal to record the write-off is:

Debit Allowance for doubtful accounts $6,400

Credit Accounts receivable $6,400

Cash realizable value of the accounts receivable (1) before the write-off is $670,300 (2) after the write-off is $670,300.

Explanation:

The write-off would impact the allowance for doubtful accounts and the accounts receivable since Bramble Corp. uses the allowance method. See the journals as recorded above. The balance in the allowance for doubtful accounts would have reduced by $6,400 upon the write-off, so did the balance in the accounts receivable, so the effect of the write-off evens out. That led to the cash realizable value of $670,300.