Providing for Doubtful Accounts
At the end of the current year, the accounts receivable account
has a debit balance of $2,950,000 and sales for the year total
$27,400,000.
- The allowance account before adjustment has a debit balance of
$9,500. Bad debt expense is estimated at 3/4 of 1% of sales.
- The allowance account before adjustment has a debit balance of
$9,500. An aging of the accounts in the customer ledger indicates
estimated doubtful accounts of $188,000.
- The allowance account before adjustment has a credit balance of
$31,400. Bad debt expense is estimated at 1/2 of 1% of sales.
- The allowance account before adjustment has a credit balance of
$31,400. An aging of the accounts in the customer ledger indicates
estimated doubtful accounts of $175,000.
Determine the amount of the adjusting entry to provide for
doubtful accounts under each of the assumptions (a through d)
listed above.