Question

Exercise 7-8 At the end of 2017, Headland Company has accounts receivable of $868,800 and an allowance for doubtful accounts of $49,900. On January 16, 2018, Headland Company determined that its receivable from Ramirez Company of $7,190 will not be collected, and management authorized its write-off.

Prepare the journal entry for Headland Company to write off the Ramirez receivable. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 16, 2018 SHOW LIST OF ACCOUNTS Exercise 7-8 Accounts Payable Accounts Receivable Advertising Expense Allowance for Doubtful Accounts Bad Debt Expense Cash Cash Over and Short Due from Factor Due to Customer Discount on Notes Payable Discount on Notes Receivable Freight-In Freight-Out Gain on Disposal of Land Interest Expense Interest Payable Interest Receivable Interest Revenue Inventory Land Loss on Sale of Receivables Miscellaneous Expenses No Entry Notes Payable Notes Receivable Office Expense Owner's Drawings Petty Cash Postage Expense Purchase Discounts Recourse Liability Sales Discounts Sales Discounts Forfeited Sales Revenue Service Revenue Supplies Supplies Expenses Unearned Sales Revenue LINK TO TEXT

What is the net realizable value of Headland Company’s accounts receivable before the write-off of the Ramirez receivable? Net realizable value $ SHOW LIST OF ACCOUNTS LINK TO TEXT

What is the net realizable value of Headland Company’s accounts receivable after the write-off of the Ramirez receivable? Net realizable value $ SHOW LIST OF ACCOUNTS LINK TO TEXT

Answer 1

Prepare the journal entry for Headland Company to write off the Ramirez receivable. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 16, 2018	Allowance for doubtful accounts	7190
	Account receivable		7190

b) Net realizable value = 868800-49900 = 818900

c) Net realizable value = 818900