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Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $368,000 and credit sales are $1,000,000. An aging of accounts
Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $368,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 7% 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 $2,000 before adjustment? Oa. Bad Debt Expense 24,760 Allowance for Doubtful Accounts 24,760 Ob. Bad Debt Expense 23,260 Allowance for Doubtful Accounts 23,260 Oc. Bad Debt Expense 22,760 Allowance for Doubtful Accounts 22,760 Od. Bad Debt Expense 23,760 Allowance for Doubtful Accounts 23,760 Allowance for Doubtful Accounts has a debit balance of $245 at the end of the year (before adjustment), and Bad Debt Expense is estimated at 3% of sales. If net credit sales are $943,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is Oa. $28,045 Ob. $28,535 Oc. $245 Od. $28,290
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