Question
3 percent of outstanding accounts receivable are uncollectible. Accounts Receivable, December 31, 2011 ............ $ 590,000 Allowance for Doubtful Accounts before adjustment, December 31, 2011
3 percent of outstanding accounts receivable are uncollectible.
Accounts Receivable, December 31, 2011 ............ $ 590,000 Allowance for Doubtful Accounts before adjustment, December 31, 2011 ............................... 18,000 (dr) Sales--2011........................................ 2,180,000 Sales Discounts--2011 ............................. 18,000 Sales Returns--2011 ............................... 27,000
Prepare the adjusting entry for doubtful accounts expense under each of the following assumptions: (1) 3 percent of outstanding accounts receivable are uncollectible. (2) 1.5 percent of 2011 net sales are uncollectible. (3) An aging schedule of the accounts shows that $21,400 of the accounts are uncollectible.
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