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26 April, 23:16

At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previously written-off accounts were reinstated and accounts totaling $740 are written-off as uncollectible. The end of the year balance (before adjustment) in the Allowance for Doubtful Accounts should beA. $760B. $120C. $140

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  1. 27 April, 02:47
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    Option C) $140

    Explanation:

    When the company anticipate its losses the entry is:

    Bad Debts Expense - $760 - Debit

    Allowance for Doubtful Accounts - $760 - Credit

    When the accounts were written-off:

    Allowance for Doubtful Accounts $740 - Debit

    Accounts Receivable - $740 - Credit

    Allowance for Doubtful Accounts Balance $ 20

    When the previously written-off accounts were reinstated

    Accounts Receivable - $120 - Debit

    Allowance for Doubtful Accounts - $120 - Credit

    Balance at the end of the year in the Allowance for Doubtful Accounts $140.
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