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Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year,...

Allowance for Doubtful Accounts has an unadjusted balance of $500 at the end of the year, and an analysis of accounts in the customers' ledger indicates doubtful accounts of $15,000. Compute the adjusted balance in the allowance for doubtful accounts?

a.$15,000

b.$14,500

c.$14,000

d.$15,500

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Answer #1

Adjusted balance in the allowance for doubtful accounts = accounts in the customers' ledger indicates doubtful accounts = 15000

Correct answer is A $15000

Logic

Accounts in the customers' ledger indicates doubtful accounts

15000

Allowance for Doubtful Accounts has an unadjusted balance

-500

Adjustment for bad debts expense

14500

Allowance for Doubtful Accounts has an unadjusted balance

500

Add: adjustment for Bad debts expense

14500

Adjusted balance in the allowance for doubtful accounts

15000

Adjustment entries

Date

Account title

Debit

Credit

Bad debts expense

14500

Allowance for Doubtful Accounts

14500

(To record Bad debts expense for doubtful accounts of customer.)
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