E6-9 Providing for doubtful accounts
At the end of the current year, the accounts receivable account has a balance of $1,800,000 and net sales for the year total $21,600,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions:
a.the allowance account before adjustment has a negative balance of -$20,000. Bad debt expense is estimated at ½ of 1% of net sales.
b.the allowance account before adjustment has a negative balance of -$20,000. An ageing of the accounts in the customer ledger indicates estimated doubtful accounts of $145,000.
c.the allowance account before adjustment has a positive balance of $18,000. Bad debt expense is estimated at ¾ of 1% of net sales.
d.the allowance account before adjustment has a positive balance of $18,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $130,000.
E6-9 Providing for doubtful accounts
At the end of the current year, the accounts receivable account has a balance of $1,800,000 and net sales for the year total $21,600,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions:
a.the allowance account before adjustment has a negative balance of -$20,000. Bad debt expense is estimated at ½ of 1% of net sales.
b.the allowance account before adjustment has a negative balance of -$20,000. An ageing of the accounts in the customer ledger indicates estimated doubtful accounts of $145,000.
c.the allowance account before adjustment has a positive balance of $18,000. Bad debt expense is estimated at ¾ of 1% of net sales.
d.the allowance account before adjustment has a positive balance of $18,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $130,000.
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