Providing for Doubtful Accounts At the end of the current year, the accounts rec

Question

Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $844,000 and sales for the year total $9,560,000 a. The allowance account before adjustment has a credit balance of $11,400. Bad debt expense is estimated at 12 of 1% of sales. b. The allowance account before adjustment has a credit balance of $11,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of 36,500 c. The allowance account before adjustment has a debit balance of $7,200. Bad debt expense is estimated at 1/4 of 1% of sales d. The allowance account before adjustment has a debit balance of $7,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $59,800 Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. a. b. C. d.

Explanation / Answer

Calculate amount of adjusting entry :

A) Adjusting entry amount = 9560000*1%*1/2 = 47800

B) Adjusting entry amount = 36500-11400 = 25100

c) Adjusting entry amount = 9560000*1%*1/4 = 23900

d) Adjusting entry amount = 59800+7200 = 67000

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