Determine the amount to be added to Allowance for Doubtful Accounts in each of t

Question

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. (a) Credit balance of $420 in Allowance for Doubtful Accounts just prior to adjustment. Analysls of Accounts Receivable indicates uncollectible receivables of $8,640 Amount added: b) Credit balance of $420 in Allowance for Doubtful Accounts st prior to adjustment uncollectible receivables are estimated at 2% ofcedit sales, which totaled Ending balance $1,173,000 for the year Amount added: Ending balance: Previcus Next All work saved. Save and Exit Submit Test for Grading

Explanation / Answer

a) Amount added shall be $8,220 (8640-420) and the ending balance shall be $8,640.

b) Amount added shall be $23,040 ((1,173,000*2%)-420) and the ending balance shall be $23,460 (1,173,000*2%)

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