Guinevere Company has the following data extracted from its Accounts Receivable records at June 30, 2011CustomerABCDEFGсTotalsBalance Current$ 8,000 $ 5,000$ 2,000$ 4,000 $ 4,000$ 9,000 $ 2,000$ 3,000$ 2,000$ 6,000 $ 6,000$ 7,000 $ 3,000$39,000 $22,000●31 -75 Over 75daysdays$1,000$ 2,000$2,000$ 1,000$3,000$8,000$ 6,000$1,000$1,000$9,000• Guinevere's sales terms are 1/15 n/30 and it records sales at the gross amount of the invoice.Guinevere's year end is June 30• The unadjusted balance in the Allowance for Doubtful Accounts at June 30 is $8,000 dr.• Guinevere makes average sales of $2,000,000 per year and averages write offs of uncollectible balances of $100,000 per year.• Sales for the year ended June 30, 2010 are $1,400,000 credit sales and $400,000 cash sales• Guinevere has a very conservative receivables management strategy.• No adjusting entries have been recorded at June 30If Guinevere used the Allowance Method (aging) to estimate bad debts and by a detailed review of the above aged trial balance decided that an allowance of $30,000 was appropriate, then the adjustingentry on June 30 would involve a credit to the "Allowance for Uncollectible Accounts" of: If Guinevere used the Allowance Method (aging) to estimate bad debts and by a detailed review of the above aged trial balance decided that an allowance of $30,000 was appropriate, then the adjustingentry on June 30 would involve a credit to the "Allowance for Uncollectible Accounts" of:Multiple Choice$90,000Some other amount$38,000$30,000$8,000X

The uncollectibles amunt can be calculated by two methods: Direct write-off and Accounts receivable…

If Guinevere used the Allowance Method (aging) to estimate bad debts and by a detailed review of the above aged trial balance decided that an allowance of $30,000 was appropriate, then the adjusting entry on June 30 would involve a credit to the "Allowance for Uncollectible Accounts" of: Multiple Choice $90,000 Some other amount $38,000 $30,000

If Guinevere used the Allowance Method (aging) to estimate bad debts and by a detailed review of the above aged trial balance decided that an allowance of $30,000 was appropriate, then the adjusting entry on June 30 would involve a credit to the "Allowance for Uncollectible Accounts" of: Multiple Choice $90,000 Some other amount $38,000 $30,000

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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Hi,I am having a terrible time trying to understand when the balance in the allowance for doubtful account is involved in the final answer, and when it is not. Will you please explain why the answers are what they are in the attachment?
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