Smith & Sons uses the allowance method of handling its credit losses. It estimates credit losses at two percent of credit sales, which were $2,000,000 during the year. On December 31, the Accounts Receivable balance was $300,000 and the Allowance for Doubtful Accounts had a credit balance of $21,400 before adjustments. Show how accounts receivable and the allowance for doubltful accounts would appear in the December 31 Balance Sheet.

$238,600

Explanation:

Firstly, we need to compute the amount of bad debt

= Credit sale × Bad debt expense

= $2,000,000 × 2%

= $40,000

The adjusted balance of allowance will be the addition of unadjusted balance of allowance account and the bad debt expense

= $21,400 + $40,000

= $61,400

The , the balance will be :

Accounts receivables = $300,000

Less: Allowance for doubtful account = ($61,400)

Net realizable value of account receivable = $238,600

answer; according to the ( irs );

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know