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 $300 in Allowance for Doubtful Accounts just prior to adjustment.  Analysis of Accounts Receivable indicates uncollectible receivables of $8,500. (b) Credit balance of $500 in Allowance for Doubtful Accounts  just prior to adjustment.  Uncollectible receivables are estimated at 2% of credit sales, which totaled $1,000,000 for the year.

Explanation / Answer

(a) Amount added = $8,500 - $300 = $8,200

Ending balance = $8,500

(b) Amount added = $1,000,000 * 2% = $20,000

Ending balance = $20,000 + $500 = $20,500

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.