Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct regarding the entry to record estimated uncollectible receivables?

a.Accounts Receivable will be debited.

b.Allowance for Doubtful Accounts will be credited.

c.Cash will be debited.

d.Bad Debt Expense will be credited.

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct?

Bad debt expense is estimated to be $11,100.

Uncollectible accounts are estimated to be $111,000.

Uncollectible accounts are estimated to be $55,500.

Bad debt expense is estimated to be $5,550.

At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $545. During the year, $474 of previously written off accounts were reinstated and accounts totaling $690 are written off as uncollectible. The end of the year balance in the Allowance for Doubtful Accounts should be the one listed below.

Select the correct answer.

$329

$690

$474

$545

At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previously written off accounts are reinstated and accounts totaling $740 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be

a.$760.

b.$740.

c.$120.

d.$140.

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

total assets are unchanged.

net income is unchanged.

total assets decrease.

liabilities decrease.

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

Bad Debt Expense19,500

Allowance for Doubtful Accounts19,500

Bad Debt Expense22,000

Allowance for Doubtful Accounts22,000

Bad Debt Expense65,000

Allowance for Doubtful Accounts 65,000

Bad Debt Expense17,000

Allowance for Doubtful Accounts17,000