The amount of the adjusting journal entry at year-end for Matthews Company, which uses the percentage-of-sales method to estimate its Allowance for Doubtful Accounts is $9,750.
<h3>What is the percentage-of-sales method?</h3>
The percentage-of-sales method is one of the methods for estimating the Allowance for Doubtful Accounts.
This method uses a predetermined percentage that is applied on the Net Credit Sales to determine the amount of the Allowance for Doubtful Accounts for the period.
<h3>Data and Calculations:</h3>
Debit balance of Allowance for Doubtful Accounts = $2,500
Net Credit Sales = $725,000
Uncollectible estimate = 1% of net credit sales
= $7,250 ($725,000 x 1%)
Bad Debts Expense $9,750 Allowance for Doubtful Accounts $9,750 ($2,500 + $7,250)
Thus, the amount of the adjusting journal entry at year-end for Matthews Company, which uses the percentage-of-sales method to estimate its Allowance for Doubtful Accounts is $9,750.
Learn more about the Allowance for Doubtful Accounts at brainly.com/question/24938115
