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ankine Company estimates its bad debt expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Rankine calculated a total of $4,000 possible credit losses as of December 31. ccounts Receivable has a balance of $128,000 and the Allowance for Doubtful Accounts has a credit balance of $500 before adjustment at December 31. /hat is the amount of the December 31 adjustment to provide for credit losses? /hat is the net amount of accounts receivable that should be included in current assets?

ankine Company estimates its bad debt expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Rankine calculated a total of $4,000 possible credit losses as of December 31. ccounts Receivable has a balance of $128,000 and the Allowance for Doubtful Accounts has a credit balance of $500 before adjustment at December 31. /hat is the amount of the December 31 adjustment to provide for credit losses? /hat is the net amount of accounts receivable that should be included in current assets?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accounting for Doubtful Accounts Rankine Company estimates its bad debt expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Rankine calculated a total of $4,000 in possible credit losses as of December 31. Accounts Receivable has a balance of $128,000 and the Allowance for Doubtful Accounts has a credit balance of $500 before adjustment at December 31. What is the amount of the December 31 adjustment to provide for credit losses? What is the net amount of accounts receivable that should be included in current assets? $ 0
Transcribed Image Text:Accounting for Doubtful Accounts Rankine Company estimates its bad debt expense by aging its accounts receivable and applying percentages to various age groups of the accounts. Rankine calculated a total of $4,000 in possible credit losses as of December 31. Accounts Receivable has a balance of $128,000 and the Allowance for Doubtful Accounts has a credit balance of $500 before adjustment at December 31. What is the amount of the December 31 adjustment to provide for credit losses? What is the net amount of accounts receivable that should be included in current assets? $ 0
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