DVAH Company estimates that 6% of accounts receivable will be uncollectible. Thetotal credit sales for the year 2020 were P1,000,000, accounts receivable as ofDecember 31, 2020 was P200,000 (before any adjustments), and allowance fordoubtful accounts is 10,000 before any adjustments.Determine the adjusted balance or the should be balance of the allowance account.

Solution: Adjusted balance of allowance accounts = accounts receivable * 6%

DVAH Company estimates that 6% of aCcounts receivable will be uncollectib cotal credit sales for the year 2020 were P1,000,000, accounts receivable as December 31, 2020 was P200,000 (before any adjustments), and allowance Houbtful accounts is 10,000 before any adjustments.

DVAH Company estimates that 6% of aCcounts receivable will be uncollectib cotal credit sales for the year 2020 were P1,000,000, accounts receivable as December 31, 2020 was P200,000 (before any adjustments), and allowance Houbtful accounts is 10,000 before any adjustments.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10EB: Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts...

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Question

DVAH Company estimates that 6% of accounts receivable will be uncollectible. The
total credit sales for the year 2020 were P1,000,000, accounts receivable as of
December 31, 2020 was P200,000 (before any adjustments), and allowance for
doubtful accounts is 10,000 before any adjustments.
Determine the adjusted balance or the should be balance of the allowance account.

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