Providing for doubtful accounts Obj. 4 At the end of the current year, the accounts receivable account

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Providing for doubtful accounts Obj. 4 At the end of the current year, the accounts receivable account has a debit balance of $1,835,000 and sales for the year total $25,690,000. 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 $12,500. Bad debt expense is estimated at ½ of 1%

of sales.

b. The allowance account before adjustment has a debit balance of $12,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $162,000.

c. The allowance account before adjustment has a credit balance of $26,810. Bad debt expense is estimated at ¾ of 1% of sales.

d. The allowance account before adjustment has a credit balance of $26,810. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $171,200.

AppendixLO1

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Corporate Financial Accounting

ISBN: 9781337398176

15th Edition

Authors: Carl Warren, Jefferson Jones

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