On January 1, American Company's Allowance for Doubtful Accounts Had

Essay

On January 1, American Company's allowance for doubtful accounts had a credit balance of $3,000. The balance in the Accounts Receivable account on that date was $75,000. On January 2, prior to any credit sales, a $500 account from National Company was deemed to be uncollectible and written off.
Required:
A.Compute the net realizable value of American's receivables on January 1.
B.Prepare the journal entry American would record on January 2 related to the write-off of National's account.
C.Compute the net realizable value of American's receivables on January 2, immediately following the write-off of National's account.