At the end of the current year, the accounts receivable account has a debit balance of $6,800,000
Question:
At the end of the current year, the accounts receivable account has a debit balance of $6,800,000 and sales for the year total $81,500,000. 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 debit balance of $68,250. Bad debt expense is estimated at 3⁄4 of 1% of sales.
b. The allowance account before adjustment has a debit balance of $68,250. The aging of the accounts in the customer ledger indicates estimated doubtful accounts of $575,000.
c. The allowance account before adjustment has a credit balance of $45,000. Bad debt expense is estimated at 1⁄2 of 1% of sales.
d. The allowance account before adjustment has a credit balance of $45,000. The aging of the accounts in the customer ledger indicates estimated doubtful accounts of $450,000.
Accounting
ISBN: 9781337902687
28th Edition
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider