Question

In 2022 the Concord Corporation had net credit sales of $830000. On January 1, 2022, the Allowance for Doubtful Accounts had a credit balance of $21200. During 2022, $32300 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage-of-receivables basis). If the accounts receivable balance at December 31 was $223000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2022

Answer 1

Answer:

$33,400

Explanation:

Calculation to determine the required adjustment to the Allowance for Doubtful Accounts at December 31, 2022

Required ending balance of allowance for doubtful accounts 22,300

(223000 * 10%)

Less Beginning credit balance of allowance for doubtful accounts (21,200)

Add Uncollectible accounts receivables written off 32,300

Adjustment to allowance for doubtful accounts $33,400

(22,300+21,200+32,300)

Therefore the required adjustment to the Allowance for Doubtful Accounts at December 31, 2022 will be $33,400