**Allowance for Doubtful Accounts Calculation***Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case.***a.** Credit balance of $310 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $8,520.- **Amount added**: $______- **Ending balance**: $______**b.** Credit balance of $310 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 3% of credit sales, which totaled $1,028,000 for the year.- **Amount added**: $______- **Ending balance**: $______---The provided text outlines two scenarios for calculating the Allowance for Doubtful Accounts, which is an important aspect of bad debt estimation in accounting. **Scenario a:** Here, the aging method is used to estimate the balance necessary in the Allowance for Doubtful Accounts. The company begins with a credit balance of $310 and must adjust this to reach a target balance of $8,520.**Scenario b:**In this scenario, the bad debt expense is calculated as 3% of total credit sales for the year, which amounts to $1,028,000. The company must adjust the credit balance of $310 accordingly to reflect this estimated bad debt.In both scenarios, students are required to compute the amount that needs to be added to the Allowance for Doubtful Accounts and to determine the ending balance after the adjustment is made.

It is pertinent to note that allowance for doubtful debts is the estimated amount of accounts…

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. a. Credit balance of $310 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $8,520. Amount added $ Ending balance b. Credit balance of $310 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 3% of credit sales, which totaled $1,028,000 for the year. Amount added 2$ Ending balance

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. a. Credit balance of $310 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $8,520. Amount added $ Ending balance b. Credit balance of $310 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 3% of credit sales, which totaled $1,028,000 for the year. Amount added 2$ Ending balance

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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