What will be balances in the allowance for doubtful accounts

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Question

Beta Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of:

Dollar Value      Age of Account   Estimated Collectible

$250,000   < 30 days old     98.0%

70,000  30 to 60 days old   93.0%

40,000  61 to 120 days old  70.0%

5,000   > 120 days old  19.0%

The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted balance of zero. After the adjusting entry is made, what will be the dollar balances in the Allowance for Doubtful Accounts? Round to nearest whole dollar.

Reference no: EM132385760

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