At the end of the current year, the accounts receivable account has a balance of $2,875,000 and sales for the year total $34,500,000.
Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following independent assumptions:
a. The allowance account before adjustment has
a negative balance of $(18,500). Bad debt expense is estimated at ½
of 1% of net sales.
$
b. The allowance account before adjustment has
a negative balance of $(18,500). An aging of the accounts in the
customer ledger indicates estimated doubtful accounts of
$200,000.
$
c. The allowance account before adjustment has
a positive balance of $9,000. Bad debt expense is estimated at ¾ of
1% of sales.
$
d. The allowance account before adjustment has
a positive balance of $9,000. An aging of the accounts in the
customer ledger indicates estimated doubtful accounts of
$255,000.
$
At the end of the current year, the accounts receivable account has a balance of $2,875,000...
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