At the end of the current year, the accounts receivable account has a debit balance of $6,800,000 and sales for the year total $81,500,000. 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 debit balance of $68,250. Bad debt expense is estimated at ¾ of 1% of sales.b. The allowance account before adjustment has a debit balance of $68,250. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $575,000.c. The allowance account before adjustment has a credit balance of $45,000. Bad debt expense is estimated at ½ of 1% of sales.d. The allowance account before adjustment has a credit balance of $45,000. An aging of  the accounts in the customer ledger indicates estimated doubtful accounts of $450,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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At the end of the current year, the accounts receivable account has a debit balance of $6,800,000 and sales for the year total $81,500,000. 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 debit balance of $68,250. Bad debt expense is estimated at ¾ of 1% of sales.
b. The allowance account before adjustment has a debit balance of $68,250. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $575,000.
c. The allowance account before adjustment has a credit balance of $45,000. Bad debt expense is estimated at ½ of 1% of sales.
d. The allowance account before adjustment has a credit balance of $45,000. An aging of  the accounts in the customer ledger indicates estimated doubtful accounts of $450,000.

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