Providing for doubtful accounts
At the end of the current year, the accounts receivable account has a debit balance of $844,000 and sales for the year total $9,560,000.
a. The allowance account before adjustment has a debit balance of $11,400. Bad debt expense is estimated at 1/4 of 1% of sales.
b. The allowance account before adjustment has a debit balance of $11,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of
$36,500.
c. The allowance account before adjustment has a credit balance of $4,700. Bad debt expense is estimated at 1/2 of 1% of sales.
d. The allowance account before adjustment has a credit balance of $4,700. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of
$39,000.
Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.