Determine the following for each case:

1. The amount to be added to Allowance for Doubtful Accounts.

2. The ending balance of the Allowance for Doubtful Accounts.

Case

(alpha) Credit balance of $500 in the allowance account just prior to adjustment. Using the Analysis of A/R Method indicates doubtful accounts of $8,500.

(beta) Credit balance of $300 in the allowance account just prior to adjustment. Uncollectible accounts are estimated at 2% of sales, using the % of Sales Method, which totaled $1,000,000 for the year.

ANSWERS:

Case

Alpha. 1.

2.

Beta. 1.

2.