Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 16

Analysis of accounts receivable and allowance for bad debts-determine ending balances A portion of the current assets section of the December 31, 2016, balance sheet for Gibbs Co. is presented here:

The company's accounting records revealed the following information for the year ended December 31, 2017:

Required:
Calculate the net realizable value of accounts receivable at December 31, 2017, and prepare the appropriate balance sheet presentation for Gibbs Co. as of that point in time. (Hint: Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts.)