Respuesta :
Answer:
The solution of question will be as follows;
Explanation:
a. $416,900*3%=$12,507
Allowance for the year shall be =$12,507-$2,545=$9,962
Bad Debt Expense Dr.$9,962
Allowance for Doubtful Accounts Cr.$9,962
b.$416,900*3%=$12,507+$950=$13,457
Bad Debt Expense Dr.$13,457
allowance for Doubtful Accounts Cr.$13,457
Answer:
Accounts receivable are $416,900 at the end of the year,
Allowance for doubtful accounts has a credit balance of $2,545.
Bad Debts = 3% of accounts receivable= 3% * 416,900= 12507
The adjusting entry would be
Bad Debts Expense $ 12507 Dr.
Allowance for doubtful accounts $ 12507 Credit
As we already have a credit balance of $ 2545 in the doubtful accounts we will increase it with an amount of $ 9962 .
a) Required adjustment of $ 9962 in the Allowance for Uncollectibles
b) If we have debit balance then
Unadjusted Balance of Uncollectibles $ 950 Dr.
Estimated Balances $ 12507
Required Adjustment $ 13547
The data tells that the Allowance for Doubtful Accounts has a debit balance of $950 the required adjustment to the allowance for doubtful accounts is $13547. The required entry is
Bad debts Expense 13547 Dr.
Allowance for Uncollectibles 13547 Cr.