Providing for Doubtful AccountsAt the end of the current year, the accounts receivable account has a debit balance of $1,191,000 and sales for the year total $13,510,000.The allowance account before adjustment has a credit balance of $16,100. Bad debt expense is estimated at 3/4 of 1% of sales.The allowance account before adjustment has a credit balance of $16,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $51,500.The allowance account before adjustment has a debit balance of $7,000. Bad debt expense is estimated at 1/4 of 1% of sales.The allowance account before adjustment has a debit balance of $7,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $58,100.Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.a.$b.$c.$d.$

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Asked Dec 5, 2019
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Providing for Doubtful Accounts

At the end of the current year, the accounts receivable account has a debit balance of $1,191,000 and sales for the year total $13,510,000.

  1. The allowance account before adjustment has a credit balance of $16,100. Bad debt expense is estimated at 3/4 of 1% of sales.
  2. The allowance account before adjustment has a credit balance of $16,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $51,500.
  3. The allowance account before adjustment has a debit balance of $7,000. Bad debt expense is estimated at 1/4 of 1% of sales.
  4. The allowance account before adjustment has a debit balance of $7,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $58,100.

Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.

a. $
b. $
c. $
d. $
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Step 1
  1. Compute amount of adjusting entry to provide for doubtful accounts under assumption 1 as shown below:
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Adjusting amount for doubtful accounts = Salesx Estimated percentage of bad debts 3 =$13,510,000×1%- 4 = $101,325 Therefore, the amount for adjusting entry for doubtful accounts is $101,325.

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Step 2

b. Compute amount of adjusting entry to provide for doubtful accounts under assumption 2 as shown below:

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Unadjusted credit balance Adjusting amount = Estimated doubtful accounts- for doubtful accounts for doubtful accounts = $51,500– $16,100 = $35, 400 Therefore, amount for adjusting entry for uncollectible accounts is $35,400.

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Step 3

c. Compute amount of adjusting entry to provide for doubtful accounts ...

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Adjusting amount for doubtful accounts = Salesx Estimated percentage of bad debts =$13,510,000×1%÷ = $33,775 Therefore, amount for adjusting entry of doubtful accounts is $33,775.

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