Question

-A company has $287,000 in credit sales. The company uses the allowance method to account for...

-A company has $287,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $2,210 credit balance. If the company estimates that $7,670 of accounts will be uncollectible based on an aging of Accounts? Receivable, what will be the amount of the journal entry to record estimated uncollectible?accounts?

A.

$2,210

B.

7,670

C.

$9,880

D.

$5,460

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Answer #1

The total estimated uncollectible amount at the end of the year is $7,670 which represents the required balance in allowance for doubtful accounts account at the end of the period. Since the company already has a credit balance of $2,210 in allowance for doubtful accounts account, the year-end adjusting entry will be made for the amount of only $5460 ($7,670 - $2,210)

Journal Enrty

Uncollectible account expenses Dr. $5,460

Allownace FFor Doubtful Accounts Cr $5,460

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