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Prepare the entry to adjust allowance for doubtful accounts

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Question - Andy Corp. uses a mix of procedures and the allowance method to record the impairment on their Accounts Receivables balance. The following information relates to balances and transactions recorded in the Allowance for Doubtful Accounts (AFDA) during the 2017 fiscal year:

Opening balance in account on January 1, 2017 = $406,000 (credit)

During 2017, bad debt expense was recorded in the AFDA as 0.78% of net credit sales of $72 million

During 2017, uncollectible receivables amounting to $486,000 were written off against the AFDA

On December 31, 2017, based on an aging of Accounts Receivable, the AFDA closing balance should be measured at $523,000 (credit)

Required - Prepare the entry to adjust Allowance for Doubtful Accounts and bad debts expense at December, 31, 2017. Please show calculations clearly.

Reference no: EM133047804

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