Assume the following unadjusted account balances at the end of the accounting pe

Question

Assume the following unadjusted account balances at the end of the accounting period: Accounts Receivable, $15,000; Allowances for Uncollectible Accounts, $400 (debit balance); Net sales, $100,000. If the company's past experience indicates credit losses of 2% of net sales, the adjusting entry to estimate uncollectible accounts is:
Answer
A.
Bad Debts Expense
2,000


Allowance for Uncollectible Accounts

2,000

B.
Bad Debts Expense
2,400


Allowance for Uncollectible Accounts

2,400

C.
Bad Debts Expense
1,600


Allowance for Uncollectible Accounts

1,600

D.
Bad Debts Expense
2,000


Accounts Receivable

2,000

E. None of the above

Explanation / Answer

answer is B 2000+400=2400

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