Question

At the end of the current year, the accounts receivable account has a debit balance of $650,000, and net sales for the year total $5,500,000. 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 credit balance of $3,175. Bad debt expense is estimated at 1⁄4 of 1% of net sales.
b. The allowance account before adjustment has a credit balance of $4,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $17,500.
c. The allowance account before adjustment has a debit balance of $8,100. Bad debt expense is estimated at 1⁄2 of 1% of net sales.
d. The allowance account before adjustment has a debit balance of $8,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $24,650.



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  • CreatedJuly 17, 2012
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