eBook Show Me How Calculator Print Item At the end of the current year, the acco
ID: 2341733 • Letter: E
Question
eBook Show Me How Calculator Print Item At the end of the current year, the accounts receivable account has a debit balance of $659,000 and sales for the year total $7,470,000, a. The allowance account before adjustment has a credit balance of $8,900. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a credit balance of $8,900. An aging of the accounts in the customer ledger indicates c. The allowance account before adjustment has a debit balance of $7,400. Bad debt expense is estimated at 1/4 of 1% of sales. estimated doubtful accounts of $28,500 d. The allowance account before adjustment has a debit balance of $7, 400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $61,400. sting entry to provide for doubrful accounts under each of the assumptions (a through d) isted above. b.Explanation / Answer
a. Amount of the adjusting entry to provide for doubtful accounts = $7,470,000 × 0.0050 = $37,350
b. Amount of the adjusting entry to provide for doubtful accounts = $28,500 - $8,900 = $19,600
c. Amount of the adjusting entry to provide for doubtful accounts = $7,470,000 × 0.0025 = $18,675
d. Amount of the adjusting entry to provide for doubtful accounts = $61,400 + $7,400 = $68,800
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