During its first year of operations, Gavin Company had credit sales of $3,000,000; $600,000 remained uncollected at year-end. The credit manager estimates that $31,000 of these receivables will become uncollectible. Required:
a. Prepare the journal entry to record the estimated uncollectibles.
b. Prepare the current assets section of the balance sheet for Gavin Company. Assume that in addition to the receivables it has cash of $90,000, inventory of $ 130,000, and prepaid insurance of $7, 500.

a.

Date                 Account Title                                          Debit              Credit

XX-XX             Bad debts expense                             $31,000

                        Allowance for doubtful debts                                   $31,000

b. Current assets section of balance sheet

Current Assets                                      

Cash                                                       $90,000

Accounts Receivable                            $569,000

Inventory                                                $130,000

Prepaid Insurance                                  $  7,500

Total                                                        $796,000  

Accounts Receivable = Unadjusted accounts received - allowance for doubtful debt:

= 600,000 - 31,000

= $569,000

i think you have to let the moderators that you want your old account to be activated.

answer; organizational;