BE8-3 At the end of 2011, Tatham Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $25,000. On January 24, 2012, it is learned that the company’s receivable from Nardin Inc. is not collectible and therefore management authorizes a write-off of $4,300.

(a) Prepare the journal entry to record the write-off.

(b) What is the cash realizable value of the accounts receivable (1) before the write-off

and (2) after the write-off?

BE8-4 Assume the same information as BE8-3 and that on March 4, 2012, Tatham Co.

receives payment of $4,300 in full from Nardin Inc. Prepare the journal entries to record

this transaction.

BE8-5 Lynch Co. uses the percentage of receivables basis to record bad debts expense

and concludes that 2% of accounts receivable will become uncollectible. Accounts receivable are $400,000 at the end of the year, and the allowance for doubtful accounts has a

credit balance of $2,800.

(a) Prepare the adjusting journal entry to record bad debts expense for the year.

(b) If the allowance for doubtful accounts had a debit balance of $900 instead of a credit

balance of $2,800, prepare the adjusting journal entry for bad debts expense.