In the given question, estimate of uncollectible amounts totals to $6400. Allowance for doubtful accounts has a $1300 debit balance. now the question is the adjustment to record the bad debt expense for the period will require
The correct answer for the given question is Option C
Because Allowance for Doubtful Accounts has a credit balance and also is represented on the liabilities side. And in the question Allowance for Doubtful Accounts is showing a debit balance of $1300. It might be represented as below:
Allowance for Doubtful Accounts A/c Dr 1300
To Bad debts 1300
At the year end Allowance for Doubtful Accounts is $6400, So now effectively you have to pass the following entry to bring the Allowance for Doubtful Accounts to $6400.
Bad Debts A/c Dr 7700
To Allowance for Doubtful Accounts A/c 7700
The net effect of the above two entries would be as follows which gives us the desired position:
Bad Debts A/c Dr 6400
To Allowance for Doubtful Accounts A/c 6400
Reasons for others being incorrect:
a. If you debit bad debts by $6400, the net bad debts & Allowance for Doubtful Accounts that would remain is $5100.
b. If you debit bad debts by $5100, the net bad debts & Allowance for Doubtful Accounts that would remain is $3800.
c. If you credit .Allowance for Doubtful Accounts by $1300, then the Allowance for Doubtful Accounts would show a nil balance.
The above reasons can be understood by the logics of journal entries as passed above for the right choice.
An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $6,400. If...
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Question 33 4 pts An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a debit to Allowance for Doubtful Accounts for $3,800 debit to Bad Debts Expense for $3,800 debit to Allowance for Doubtful Accounts for $5,000 credit to Allowance for Doubtful for $5,000
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please help with these accounting problems! all questions please and thank you! 6. An aging of a company's accounts receivable indicates that $9,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $2,400 credit balance, the adjustment to record bad debts for the period will require a A) debit to Bad Debt Expense for $9,000. B) debit to Allowance for Doubtful Accounts for $6,600. C) debit to Bad Debt Expense for $6,600. D) credit to Allowance for...