A company ages its accounts receivables to determine its end of period adjustmen

Question

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $675. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

A

B

C

D

Explanation / Answer

desired balance in allowance account 24,750 credit current balance 675 debit required: adjustment for allowance 25,425 credit Debit bad debt expense 25425 Credit allowance for doubtful account 25425

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