Answer:
a. Adjustment for bad debts expenses in scenario a - $ 32,900
b. Adjustment for bad debts expenses in scenario b - $ 22,700
c. Adjustment for bad debts expenses in scenario c - $ 72,700
d. Adjustment for bad debts expenses in scenario d - $ 73,500
Explanation:
Computation of bad debts adjustment under scenario a
Receivables balance                                                                   $    762,000
Sales                                                                                             <u>$ 8,640,000</u>
Estimated bad debts expenses 1/2 % of sales                           $      43,200
Pre adjustment balance of allowance for uncollectible            <u>$ (     10,300)</u>
Adjustment to provide doubtful accounts                                  $      32,900
Computation of bad debts adjustment under scenario b
Estimated bad debts expenses based on ageing                     $      33,000
Pre adjustment balance of allowance for uncollectible            <u>$ (     10,300)</u>
Adjustment to provide doubtful accounts                                  $      22,700
Computation of bad debts adjustment under scenario c
Receivables balance                                                                   $    762,000
Sales                                                                                             <u>$ 8,640,000</u>
Estimated bad debts expenses 3/4 % of sales                           $     64,800
Pre adjustment balance of allowance for uncollectible DR.      <u>$       7,900</u>
Adjustment to provide doubtful accounts                                  $      72,700
The pre adjustment balance is a debit balance of $ 7,900, so it has to be added to the required allowance balance
Computation of bad debts adjustment under scenario d
Estimated bad debts expenses based on ageing                     $      65,600
Pre adjustment balance of allowance for uncollectible  DR      <u>$        7,900</u>
Adjustment to provide doubtful accounts                                  $      73,500
The pre adjustment balance is a debit balance of $ 7,900, so it has to be added to the required allowance balance