Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 14

Providing for doubtful accounts
At the end of the current year, the accounts receivable account has a debit balance of $1,400,000 and sales for the year total $15,350,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions:
a. The allowance account before adjustment has a debit balance of $23,000. Bad debt expense is estimated at ¾ of 1% of sales.
b. The allowance account before adjustment has a debit balance of $23,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $125,000.
c. The allowance account before adjustment has a credit balance of $14,500. Bad debt expense is estimated at ½ of 1% of sales.
d. The allowance account before adjustment has a credit balance of $14,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $180,000.