2. Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.\

1. Dr Bad debt expense16,500

Cr Allowance for uncollectible accounts16,500

2. Bad debt expense$16,500

Allowance for uncollectible accounts=$13,600

3. $122,400

Explanation:

1. Preparation of the Journal entry to Record the adjustment for uncollectible accounts on December 31, 2012.

Dec. 31,2012

Dr Bad debt expense16,500

Cr Allowance for uncollectible accounts 16,500

($136,000 × 10% + $2,900 = $16,500)

2. Calculation to Determine the amount at which bad debt expense and allowance for uncollectible accounts is reported

Bad debt expense is reported in the income statement as :

Bad debt expense$16,500

($136,000 × 10% + $2,900 = $16,500)

Allowance for uncollectible accounts is reported in the balance sheet as:

Using this formula

Allowance for uncollectible accounts=Credit adjustment-Credit balance before adjustment

Let plug in the formula

Allowance for uncollectible accounts= $16,500-$2,900

Allowance for uncollectible accounts=$13,600

3. Calculation for the net realizable value of accounts receivable.

Net realizable value

Accounts Receivable $136,000

Add Allowance for Uncollectible Accounts

$2,900

Less Bad debt expense(16,500)

Net realizable value$122,400

Therefore the Net realizable value is $122,400

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