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At the end of the current year, Accounts Receivable has a balance of $535,000; Allowance for Doubtful Accounts has a debit balance of $5,000; and sales for the year total $2,410,000. Bad debt expense is estimated at 1/4 of 1% of sales.
Problem a. Estimate the amount of the adjusting entry for uncollectible accounts.
Problem b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
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