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In 2018, Boyle Company had credit sales of $900,000. On January 1, 2018, Allowance for Doubtful Accounts had a credit balance of $22,500. During 2018,
In 2018, Boyle Company had credit sales of $900,000. On January 1, 2018, Allowance for Doubtful Accounts had a credit balance of $22,500. During 2018, $36,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance balance should be 10% of the accounts receivable become uncollectible. What should be the required adjustment to the Allowance for Doubtful Accounts at December 31, 2018 if the ending accounts receivable balance was $240,000?
a. $37,500 b. $24,000 c. $36,000 d. $46,500
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