Question
The following information is provided for the Dawdy Company at December 31, Year3, just before any adjusting entries were made. All balance are normal (debit
The following information is provided for the Dawdy Company at December 31, Year3, just before any adjusting entries were made. All balance are normal (debit vs. credit) unless I indicate otherwise.
Net Credit Sales during Year3
$900,000
Accounts Receivable Balance at 12/31/Year3
120,000
Allowance for Uncollectible Accounts (debit balance) at 12/31/Year3 (abnormal balance)
3,000
Assume Dawdy prepared the following aging of accounts receivable at December 31, Year3.
Age
Accounts Receivable
Percentage
Estimated Uncollectible
Estimate of uncollectible amount
Current
$80,000
10%
8,000
31-60 days
20,000
15%
3,000
61-90 days
15,000
30%
4,500
Over 90 days
5,000
40%
2,000
Totals
$120,000
$17,500
After the adjusting entry, the balance in the Allowance for uncollectible accounts will be:
A.
17500
B.
14500
C.
6500
D.
23500
E.
20500
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