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Ede4ka [16]
3 years ago
5

A company has $96,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts.

Experience suggests that 5% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $860 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:
Business
1 answer:
nekit [7.7K]3 years ago
3 0

Answer:

$3,940

Explanation:

The journal entry to record the adjustment to the allowance account includes-

Debit   Bade debt expense                        $3,940 (Note - 1)

Credit  Allowance for doubtful accounts  $3,940

<em>Note - 1</em>

Calculation = $96,000 × 5% = $4,800

However, as the allowance for doubtful accounts has a credit balance of $860 credit, the new bad debt expense will be = ($4,800 - $860) = $3,940 debit.

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Answer:

Marginal thinking

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4 years ago
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Based on the selling price of the car and the cost to work on it, Savion should sell the car now for $3,800.

<h3>Why should Savion sell the car?</h3><h3 />

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The profit from selling the car is $3,800 which is more than the profit if additional work is done of $3,400.

The $4,000 is irrelevant as it is a sunk cost.

Find out more on sunk costs at brainly.com/question/13695005.

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