Find allowance method to account for uncollectible accounts

Reference no: EM131520227

Question: Brady is hired in 2012 to be the accountant for Anderson Manufacturing, a private company. At the end of 2012, the balance of Accounts Receivable is $24,000. In the past, Anderson has used only the direct write-off method to account for bad debts. Based on a detailed analysis of amounts owed, Brady believes the best estimate of future bad debts is $8,000. If Anderson continues to use the direct write-off method to account for uncollectible accounts, what adjustment, if any, would Brady record at the end of 2012? What adjustment, if any, would Brady record if Anderson instead uses the allowance method to account for uncollectible accounts?

Reference no: EM131520227

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