A company ages its accounts receivables to determine its end of period adjustmen

Question

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $17,250 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $425. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Explanation / Answer

C. Bad Debts Expense 17,675 Allowance for Doubtful Accounts   17,675 Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Existing balance in Allowance for doubtful accounts 425 Dr Required balance in Allowance for doubtful accounts 17,250 CR More allowance required = 17250 - (-425)              17,675.00 Dr CR Bad Debt Expense Dr              17,675.00 To Allowance for doubtful accounts              17,675.00

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