Question

Using the aging method, Carlton Company calculates the estimated ending balance in the Allowance for Uncollectible Accounts to be $12,000. Prior to adjusting entries, the Allowance for Uncollectible Accounts has a credit balance of $3,000. The year-end adjustment would include a:________.

Answer 1

Answer: Debit to bad debt expense for $9000 (12000-3000)

Explanation:

debit to Bad Debt Expense for $12,000

debit to Bad Debt Expense for $9,000 which is ($12,000-$3,000)

credit to Allowance for Uncollectible Accounts for $15,000 which is ($12,000+$3,000)

credit to Allowance for Uncollectible Accounts for $12,000

debit to bad debt expense for $9000 which is (12000-3000)

Answer 2

Answer:

Te year-end adjustment would include:

Dr Bad debts expense                           $9000

Cr Allowance for uncollectible accounts             $9000

Explanation:

From all indications, there is an increase of $9000 ($12000-$3000) in allowance for uncollectible accounts,hence bad debts expense should be debited with $9000 and allowance for uncollectible accounts be credited with the same amount.

Accounts for uncollectible for accounts `indicates that an asset ,accounts receivable ,is reducing,as a result should be credited since a reduction in asset account should naturally be a credit entry.

On other side,there is $9000 increase in expense which be debited.