At the End of the Current Year, the Trial Balance $\begin{array}{lr}\text { Accounts Receivable } & \$ 36,000 \mathrm{Dr} \\\text { Allowance for Doubtful Accounts } & 1,000 \mathrm{Dr}\end{array}$

Short Answer

At the end of the current year, the trial balance of Cary's Craft Shop included the accounts and balances shown below. Credit sales were $290,000. Returns and allowances on these sales were $4,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.3 percent of net credit sales. $\begin{array}{lr}\text { Accounts Receivable } & \$ 36,000 \mathrm{Dr} \\\text { Allowance for Doubtful Accounts } & 1,000 \mathrm{Dr}\end{array}$ 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?