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Providing for doubtful accounts At the end of the current year, the accounts receivable account...

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Accounting

Providing for doubtful accounts

At the end of the current year, the accounts receivable account has a debit balance of $1,835,000 and sales for the year total $25,690,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions:

  1. The allowance account before adjustment has a debit balance of $12,500. Bad debt expense is estimated at 1/4 of 1% of sales.
  2. The allowance account before adjustment has a debit balance of $12,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $26,810.
  3. The allowance account before adjustment has a credit balance of $8,000. Bad debt expense is estimated at 3/4 of 1% of sales.
  4. The allowance account before adjustment has a credit balance of $8,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $66,400.

A.

b.

c.

d.

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