At the End of the Current Year, the Trial Balance $\begin{array}{lr}\text { Accounts Receivable } & \$ 650,000 \mathrm{Dr} \\\text { Allowance for Doubtful Accounts } & 4,500 \mathrm{Dr}\end{array}$

Short Answer

At the end of the current year, the trial balance of Kerry Hardware included the accounts and balances shown below. Credit sales were $7,000,000. Returns and allowances on these sales were $55,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. $\begin{array}{lr}\text { Accounts Receivable } & \$ 650,000 \mathrm{Dr} \\\text { Allowance for Doubtful Accounts } & 4,500 \mathrm{Dr}\end{array}$ 1. What is the estimated loss from uncollectible accounts for the current year?
2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?