The bathroom is offset from the beds, located in a corner of the room near the entrance. Standard double room bathrooms are often equipped with towels, floor mats, plastic water cups, hairdryers and assorted travel size bottles of soap, shampoo, body lotion and conditioner.
Therefore a provision account called allowance for doubtful accounts is credited in the adjusting entry. Thus: The bad debts expense account, just like any other expense account, is closed to income summary account of the period. The allowance for doubtful debts is contra-asset account. Accounts Receivable. $15,000.
Answer Accounts receivable at year end are $ 30,000 ($ 400,000 sales on account 2 $ 370,000 collection of receivables). The amount in the allowance for doubtful accounts would be $ 4,000 ($ 400,000 credit sales 3 0.01). The net realizable value of accounts receivable is therefore $ 26,000 ($ 30,000 2 $ 4,000).