At the end of the current year, the accounts receivable account has a balance of $1,800,000 and

Question:

At the end of the current year, the account has a balance of $1,800,000 and net sales for the year total $21,600,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions:
a. The allowance account before adjustment has a negative balance of −$20,000. Bad debt expense is estimated at ½ of 1% of net sales.
b. The allowance account before adjustment has a negative balance of −$20,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $145,000.
c. The allowance account before adjustment has a positive balance of $18,000. Bad debt expense is estimated at ¾ of 1% of net sales.
d. The allowance account before adjustment has a positive balance of $18,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $130,000.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...