[Leeann10100]

Hi I know its summer but please just show me how to calculate this problem. Please I need help. :(

Richards Company uses the allowance method of accounting for bad debts. The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the current year.
No. of Days Outstanding …Amount …Probability of Collection
0–30 days …………………. $500,000……- .98
31–60 days …………………200,000 ……-.90
Over 60 days ……………….100,000…….. -.80
The following additional information is available for the current year:
Net credit sales for the year ……. $4,000,000
Allowance for Doubtful Accounts:
Balance, January ……….145,000 (cr)
Balance before adjustment, December 31………2,000 (dr)
If Richards determines bad debt expense using 1.5 percent of net credit sales, the net realizable value of accounts receivable on the December 31 balance sheet will be:

[Stringer]

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Suggest that you Google it.

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[Leeann10100]

Am I on the right track.

500,000 x .98 = 490,000
200,000 c .90 = 180,000
100,000 x .80 = 80,000
... 750,000

Net sales = 4,000,000 - 750,000 = 3,250,000
Balance = 3,250,000 - 145,000 = 3,105,000
Dec 31, 07 = 3,250,000 - 3,105,000 = 45,000

[morgaine300]

This doesn't belong in math. While accounting people do need to be able to do at least some reasonable math, it doesn't mean we all hang out at the math forum, so you're really reducing the appropriate audience for the post. (It's still an accounting subject after all.)

You also posted this problem already here:
https://www.askmehelpdesk.com/accoun...le-373772.html
If you want to continue to work on it, could you please continue on that thread. I already explained over there why what you're doing doesn't even need to be done.