Question

Jensen Corporation uses the percentageofsales method to estimate uncollectibles. Net credit sales for the current year amount to and management estimates ​% will be uncollectible. The Allowance for Doubtful Accounts prior to adjustment has a debit balance of . After all adjusting entries are​ made, the balance in Allowance for Uncollectible Accounts will​ be:

Answer 1

Answer:

$42,300 credit balance

Explanation:

The question is incomplete:

Jensen Corporation uses the percentage-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $2,010,000 and management estimates ​3% will be uncollectible. The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $18,000. After all adjusting entries are​ made, the balance in Allowance for Uncollectible Accounts will​ be:

uncollectible accounts = $2,010,000 x 3% = $60,300 credit

the adjusting entry at the end of the year:

December 31, 202x, bad debt expense:

Dr Bad debt 60,300

    Cr Allowance for uncollectible accounts 60,300

the ending balance of the Allowance for uncollectible accounts account = $60,300 - $18,000 (debit balance) = $42,300