The Maderite Furniture Company has an allowance for doubtful accounts account with a $300 debit balance. Net credit sales for the period were $160,000. An aging process shows that $5,400 of the accounts receivable probably will be uncollectible. In addition, Maderite Furniture believes that 4% of all net credit sales are uncollectible. The percent-of-sales method is used to account for uncollectibles. What is the amount of the adjusting entry to record bad-debt expense and what is the balance in allowance for doubtful accounts after the adjusting entry is made? OA. $6,400 and $6,700, respectively OB. $6,700 and $6,200, respectively OC. $6,400 and $6,100, respectively OD. $6,700 and $6,400, respectively
The Maderite Furniture Company has an allowance for doubtful accounts account with a $300 debit balance. Net credit sales for the period were $160,000. An aging process shows that $5,400 of the accounts receivable probably will be uncollectible. In addition, Maderite Furniture believes that 4% of all net credit sales are uncollectible. The percent-of-sales method is used to account for uncollectibles. What is the amount of the adjusting entry to record bad-debt expense and what is the balance in allowance for doubtful accounts after the adjusting entry is made? OA. $6,400 and $6,700, respectively OB. $6,700 and $6,200, respectively OC. $6,400 and $6,100, respectively OD. $6,700 and $6,400, respectively
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Maderite Furniture Company has an allowance for doubtful accounts account with a $300 debit balance. Net credit sales for the period were $160,000. An aging process shows that $5,400 of
the accounts receivable probably will be uncollectible. In addition, Maderite Furniture believes that 4% of all net credit sales are uncollectible. The percent-of-sales method is used to account for
uncollectibles.
What is the amount of the adjusting entry to record bad-debt expense and what is the balance in allowance for doubtful accounts after the adjusting entry is made?
OA. $6,400 and $6,700, respectively
OB. $6,700 and $6,200, respectively
OC. $6,400 and $6,100, respectively
OD. $6,700 and $6,400, respectively
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