Question

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $45,000. If the balance of the Allowance for Doubtful Accounts is a $6,000 debit before adjustment, what is the balance after adjustment?

Answer 1

Answer:

balanced after adjustment  $39,000

Explanation:

GIVEN DATA:

uncollectible accounts is $45,000

allowance balance = $6000

The bad debt account is the difference between the calculated ledger balance and actual ledger balanced.

balanced after adjustment can be determined by suing following relation:

Bad debt expense = uncollectible accounts - balance of the Allowance

= $45000 - $6000

= $39,000