a. The allowance account before adjustment has a negative balance of s(13,100). Bad debt expense is estimated at 1/4 of 1% of sales. b. The allowance account before adjustment has a negative balance of $(13,100). An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $41,900. 55,000 c. The allowance account before adjustment has a positive balance of $6,900. Bad debt expense is estimated at 3/4 of 1% of sales.

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 5SEB: UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current...
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Providing for Doubtful Accounts
At the end of the current year, the accounts receivable account has a balance of $969,000 and sales for the year total $10,990,000.
Determine the amount of the adjustment to provide for doubtful accounts under each of the following independent assumptions:
a. The allowance account before adjustment has a negative balance of $(13,100). Bad debt expense is estimated at 1/4 of 1% of sales.
b. The allowance account before adjustment has a negative balance of $(13,100). An aging of the accounts in the customer ledger indicates estimated doubtful accounts of
$41,900.
55,000
c. The allowance account before adjustment has a positive balance of $6,900. Bad debt expense is estimated at 3/4 of 1% of sales.
d. The allowance account before adjustment has a positive balance of $6,900. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $57,300.
Transcribed Image Text:Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a balance of $969,000 and sales for the year total $10,990,000. Determine the amount of the adjustment to provide for doubtful accounts under each of the following independent assumptions: a. The allowance account before adjustment has a negative balance of $(13,100). Bad debt expense is estimated at 1/4 of 1% of sales. b. The allowance account before adjustment has a negative balance of $(13,100). An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $41,900. 55,000 c. The allowance account before adjustment has a positive balance of $6,900. Bad debt expense is estimated at 3/4 of 1% of sales. d. The allowance account before adjustment has a positive balance of $6,900. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $57,300.
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