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Analysis of Receivables Method:
At the end of the current year, Accounts Receivable has a balance of $3,750,000, Allowance for Doubtful Accounts has a credit balance of $22,750, and sales for the year total $48,400,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $390,000.
Required:
a. Determine the amount of the adjusting entry for uncollectible accounts.

Respuesta :

Answer:

$367,250

Explanation:

Data provided

Allowance for Doubtful Accounts = $390,000

Credit balance = $22,750

The computation of the amount of the adjusting entry is shown below:-

Amount of adjusting entry = Allowance for Doubtful Accounts - Credit balance

= $390,000 - $22,750

=$367,250

Therefore for computing the amount of adjusting entry we simply subtract credit balance from allowance for doubtful accounts.

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