Prepare year-end adjusting entry to record bad debt expense

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Question - During 2014, DeLuca Company had net sales of $5,700,000. Most of the sales were on credit. At the end of 2014, the balance of Accounts Receivable was $700,000 and Allowance for Doubtful Accounts had a debit balance of $24,000. DeLuca's management uses two methods of estimating uncollectible accounts expense: the percentage of net sales method and the accounts receivable aging method. The percentage of uncollectible sales is 1.5 percent of net sales, and based on an aging of accounts receivable, the end-of-year uncollectible accounts total $70,000.

Required - Prepare the year-end adjusting entry to record the bad debt expense under each method. What will the balance of Allowance for Doubtful Accounts be after each adjustment?

Reference no: EM132522912

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