Reference no: EM133064376
Question - Providing for Doubtful Accounts - At the end of the current year, the accounts receivable account has a debit balance of $1,214,000 and sales for the year total $13,760,000.
a. The allowance account before adjustment has a debit balance of $16,400. Bad debt expense is estimated at 1/2 of 1% of sales.
b. The allowance account before adjustment has a debit balance of $16,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $52,500.
c. The allowance account before adjustment has a credit balance of $8,800. Bad debt expense is estimated at 3/4 of 1% of sales.
d. The allowance account before adjustment has a credit balance of $8,800. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $73,000.
Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions.