On January 1, 20x8, Myer Company’s allowance for doubtful accounts had a credit balance of $7499....
On January 1, 20x8, Myer Company’s allowance for doubtful accounts had a credit balance of $7499. Sales revenue for 20x8 was $1162872 of which 80% was on credit. Historical data indicates that 3 percent of credit sales prove uncollectible. The company wrote off $9989 of accounts receivable during the year. What should the balance in the allowance account be after the adjusting entry for doubtful accounts is made?
Select one:
a. $25419 cr.
b. $17920 cr.
c. $10421 dr.
d. $10421 cr.
Homework Answers
Correct answer------------$25,419 Cr
Working
| Beginning balance in allowance for doubtful accounts | $ 7,499 | Cr |
| Less: Accounts written off | $ 9,989 | Dr |
| Unadjusted balance | $ (2,490) | Dr |
| Bad debts for the year | $ 27,909 | Cr |
| Ending balance in allowance for doubtful accounts | $ 25,419 | Cr |
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On January 1, 20x8, Myer Company’s allowance for doubtful
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