Determine the Amount to Be Added to Allowance for Doubtful

Essay

Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases:
(a)Balance of $3,000 in the allowance account just prior to adjustment.Analysis of accounts receivable indicates doubtful accounts of $25,000.
(b)Balance of $500 in the allowance account just prior to adjustment.Uncollectibles are estimated at 2% of sales, which totaled $800,000 for the year.