A company has $85,000 in outstanding accounts receivable, and it uses the allowance ...

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Accounting

A company has $85,000 in outstanding accounts receivable, and it uses the allowance
method (balance sheet method) to account for uncollectible accounts. Experience suggests
that 5% of outstanding receivables are uncollectible. The current balance (before adjustments)
in the allowance for doubtful accounts is an $1,800 credit. The journal entry to record the
adjustment to the allowance account includes a debit to Bad Debts Expense for:
$4,400
$3,568
$3,600
$2,450
$2,800
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