Question
Company A as a fiscal year-end of 12/31. The Company uses the aging of receivables method to account for bad debts. At the end of
Company A as a fiscal year-end of 12/31. The Company uses the aging of receivables method to account for bad debts. At the end of the current year, using the aging of receivable method, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a DEBIT balance of $375.
1. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
2. What would be the balance of the Allowance for doubtful accounts after the adjustment is made?
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