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6 December, 22:20

A company has $294,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $2,210 credit balance. If the company estimates that $7,640 of accounts will be uncollectible based on an aging of Accounts Receivable, what will be the amount of the journal entry to record estimated uncollectible accounts

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  1. 6 December, 23:05
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    The correct answer to the given question is $5430.

    Explanation:

    Allowance method can be defined as a method which is used by the companies to adjust un collectible accounts receivables, which appears on the balance sheet in the accounting period as sales.

    Given information-

    Credit balance in allowance for doubtful debt - $2210

    Uncollectible amount as per company estimates - $7640

    Amount in uncollectible account - $7640 - $2210

    = $ 5430.
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