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LuckyWell [14K]
3 years ago
5

A company has an ending accounts receivable balance of $900,000 and estimates that uncollectible accounts will be 2% of its acco

unts receivable balance. If the Allowance for Doubtful Accounts has a credit balance of $2,000 prior to year-end adjustment. What will be the balance of the Allowance for Doubtful Accounts after year-end adjusting entries have been recorded?
Business
1 answer:
Juliette [100K]3 years ago
5 0

Answer:

$20,000

Explanation:

Allowance for uncollectible accounts will be 2% of its accounts receivable = 2% * 900,000 = $18,000

the balance of the Allowance for Doubtful Accounts after year-end = a credit balance of $2,000 + allowance for  uncollectible accounts in year of $18,000

= $20,000

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Giving the following information:

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