On march 1, terrell & associates provides legal services to whole grain bakery regarding some recent food poisoning complaints. legal services total $9,000. in payment for the services, whole grain bakery signs a 8% note requiring the payment of the face amount and interest to terrell & associates on september 1. record the acceptance of the note receivable on march 1 and the cash collection on september 1.

At the end of the current year, accounts receivable has a balance of $550,000; allowance for doubtful accounts has a credit balance of $5,500; and sales for the year total $2,500,000. an analysis of receivables estimates uncollectible receivables as $25,000. determine the net realizable value of accounts receivable after adjustment. (hint: determine the amount of the adjusting entry for bad debt expense and the adjusted balance of allowance of doubtful accounts.)