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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 $881,000 and sales for the year total $9,980,000.

  1. The allowance account before adjustment has a credit balance of $11,900. Bad debt expense is estimated at 3/4 of 1% of sales.
  2. The allowance account before adjustment has a credit balance of $11,900. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $38,100.
  3. The allowance account before adjustment has a debit balance of $7,200. Bad debt expense is estimated at 1/2 of 1% of sales.
  4. The allowance account before adjustment has a debit balance of $7,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $59,800.

Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.

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