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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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.](https://content.bartleby.com/qna-images/question/31c1d42d-bb9e-49bd-a4f2-2ab0a2891d91/3cdef828-4b76-4ff0-80eb-2142459523ea/5ialu2gm_thumbnail.jpeg)
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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