Providing for doubtful accounts
At the end of the current year, the accounts receivable account has a debit balance of
$1,006,000 and sales for the year total $11,410,000.
a. The allowance account before adjustment has a debit balance of $13,600. Bad debt
expense is estimated at 1/2 of 1% of sales.
b. The allowance account before adjustment has a debit balance of $13,600. An aging
of the accounts in the customer ledger indicates estimated doubtful accounts of
$43,500.
c. The allowance account before adjustment has a credit balance of $5,400. Bad debt
expense is estimated at 1/4 of 1% of sales.
d. The allowance account before adjustment has a credit balance of $5,400. An aging
of the accounts in the customer ledger indicates estimated doubtful accounts of
$44,800.
Determine the amount of the adjusting entry to provide for doubtful accounts under
each of the assumptions (a through d) listed above.
a. $ 57,050 ?
b. $ 13,600 X
c. $ 28,525 ?
d. $ 44,800 X
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An estimate based on a percent of sales determines the amount of the
