Question
On January 1, Year4 the Accounts Receivable and the Allowance for Doubtful Accounts carried NORMAL balances of $30,000 and $500, respectively. (The 30,000 is a
On January 1, Year4 the Accounts Receivable and the Allowance for Doubtful Accounts carried NORMAL balances of $30,000 and $500, respectively.
(The 30,000 is a positive asset and the 500 is a negative asset.)
During the year the company reported $70,000 of credit sales.
There were $550 of receivables written-off as uncollectible in Year4.
Cash collections of receivables amounted to $74,550.
The company recorded $700 of bad debt expense for Year4.
What will be the ADJUSTED balance in the allowance for uncollectible accounts at the end of Year4?
| A. | $550 normal balance [credit balance] | |
| B. | $650 normal balance [credit balance] | |
| C. | $50 normal balance [credit balance] | |
| D. | $700 normal balance [credit balance] | |
| E. | $1200 normal balance [credit balance] |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started