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neonofarm [45]
3 years ago
12

XYZ Co. uses the percentage of credit sales method of estimating doubtful accounts. The Allowance for Doubtful Accounts has an u

nadjusted credit balance of $4,100 and the company had $210,000 of net credit sales during the period. XYZ has experienced bad debt losses of 6% of credit sales in prior periods. After making the adjusting entry for estimated bad debts, what is the ending balance in the Allowance for Doubtful Accounts account
Business
1 answer:
leva [86]3 years ago
4 0

Answer:

$16,700

Explanation:

The computation of the ending balance in the allowance for doubtful account is shown below:

= Unadjusted credit balance + Net credit sales × estimated bad debt percentage

= $4,100 + $210,000 × 6%

= $4,100 + $12,600

= $16,700

We simply added the unadjsuted credit balance and estimated amount after considered the estimated bad debt percentage

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