Providing for Doubtful Accounts At the end of the current year, the accounts rec
ID: 2436184 • Letter: P
Question
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $718,000 and sales for the year total $8,140,000. The allowance account before adjustment has a credit balance of $9,700. Bad debt expense is estimated at 1/4 of 1% of sales. The allowance account before adjustment has a credit balance of $9,700. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $31,000. The allowance account before adjustment has a debit balance of $8,600. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $8,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $71,400. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.
Providing for Doubtful Accounts
At the end of the current year, the accounts receivable account has a debit balance of $718,000 and sales for the year total $8,140,000.
The allowance account before adjustment has a credit balance of $9,700. Bad debt expense is estimated at 1/4 of 1% of sales.
The allowance account before adjustment has a credit balance of $9,700. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $31,000.
The allowance account before adjustment has a debit balance of $8,600. Bad debt expense is estimated at 3/4 of 1% of sales.
The allowance account before adjustment has a debit balance of $8,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $71,400.
Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.
Explanation / Answer
Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.
a) Adjusting entry amount = 8140000*1%*1/4 = 20350
b) Adjusting entry amount = 31000-9700 = 21300
c) Adjusting entry amount = 8140000*1%*3/4 = 61050
d) Adjusting entry amount = 71400+8600 = 80000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.