Answer:
A credit of $4,149 adjustment is required in allowance for uncollectible accounts
Explanation:
The amount that should be posted to allowance for uncollectible accounts in the year is computed thus:
$26,300*13% =$3,419.00 credit entry
The allowance for uncollectible account would look like this:
Dr Balance brought forward $730
Dr Increase in the year $3,419
Adjustment required (balancing figure) $4,149
The adjustment Mercy Cosmetics would record for Allowance for uncollectible accounts is the balancing figure of $4,149 as shown above.
Find below alternative approach:
1) take 13% of accounts receivable of $26,300=($26,300*13%)=$3419
2) Add the balance for the allowance of uncollectible accounts debit($3419+$730)=$4149
3) debit bad dept expense for $4,149
4) credit allowance for uncollectible accounts $4,149
