At December 31, vickis designers had gross accounts receivable of $346,000. Historically vicki designers has estimated bad debt expense as 5% of gross receivables.

a. calculate bad debt expense for the year assuming that the allowance account currently has 1) a credit balance of $5,000 and 2)a debit balance of $1,200.

b. assume that on December 30, an account receivable of 2,000 was deemed uncollectible and written off. Prepare a journal entry to record this event. What effects does this have on 1) 2010 net income and 2) the net realizable value of receivables?

And your answer is?