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Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and uncollectible accounts expense is estimated at 2% of sales. If sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is:

Respuesta :

Answer:

$11,500

Explanation:

Given

Sales = $600,000

And uncollectible accounts expense is estimated at 2% of sales

Therefore,

uncollectible accounts expense = 2% × $600,000

                                                      = $12,000

Since allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), the account has to be adjusted by

= $12,000 - $500

= $11,500

The amount of the adjusting entry to record the provision for doubtful accounts is $11,500.

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