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faltersainse [42]
3 years ago
6

Nichols Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $2

00,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?
Business
1 answer:
lora16 [44]3 years ago
3 0

Answer:

bad debt expense 6,000 debit

allowance for uncollectible amounts 6,000 credit

Explanation:

expected allowance balance:

account receivable x expected uncollectible amount

200,000 x 4% = 8,000

currently the allowance balance is 2,000

so the amount of the adjustment will be to move the balance to 8,000 from 2,000:  adjusting entry for 6,000

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Answer:

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Explanation:

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Angelina_Jolie [31]

Answer:

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3 years ago
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Trava [24]

Answer:

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8 0
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Aleksandr [31]

Answer:

b. rise, so demand in the market for foreign-currency exchange shifts right.

Explanation:

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8 0
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Serga [27]

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