Ask Question
BusinessBusiness
19 August, 20:15

Grey Corporation has $100,000 of accounts receivable on December 31. The unadjusted balance of its Allowance for Doubtful Accounts is a credit of $1,000. Experience suggests 5 percent of its receivables will be uncollectible. The amount that should be debited to Bad Debt Expense and credited to Allowance for Doubtful Accounts in the year-end adjusting entry is: a.$1,000 b.$2,070 c.$5,000 d.$6,000 e.$4,000

+3
Answers (1)
  1. 19 August, 23:45
    0
    e. $4,000

    Explanation:

    The calculation of adjusting entry is shown below:-

    Adjusted balance required in Allowance account = Accounts receivable * Receivable percentage

    = $100,000 * 5%

    = $5,000 Credit

    Existing Unadjusted balance in Allowance account = $1,000 credit

    Bad Debt Expense = Adjusted balance required in Allowance account - Existing Unadjusted balance in Allowance account

    = $5,000 - $1,000

    = $4,000

    So, for computing the bad debt expenses we simply deduct existing Unadjusted balance in Allowance account from adjusted balance required in Allowance account
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Grey Corporation has $100,000 of accounts receivable on December 31. The unadjusted balance of its Allowance for Doubtful Accounts is a ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Paying higher wages increases worker turnover. Higher wages cause workers to shirk more of their responsibilities. Paying higher wages enhances workers to adopt healthier lifestyles, enhancing their productivity.
Answers (1)
Ship Co. produces storage crates that require 1.2 meters of material at $ 0.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is applied at the rate of $9 per direct labor hour.
Answers (1)
Sammy and Monica, both age 67, incur and pay medical expenses in excess of insurance reimbursements during the year as follows: For Sammy $16,000 For Monica (spouse) 4,000 For Chuck (son) 2,500 For Carter (Monica's father) 5,000 Sammy and Monica's
Answers (1)
The customer relationship management process involves all the activities related to receiving and approving orders, shipping the goods on time, and collecting payment. Group of answer choices True False
Answers (1)
Robyn Company produces and sells automobile batteries. The sales forecast for 2019 is as follows: Quarter Batteries (in units) 1 5,000 2 7,000 3 8,000 4 10,000 The January 1, 2019 inventory of batteries is forecasted to be 2,000 units.
Answers (1)
New Questions in Business
An automobile company with a team who builds cars, a team who tests cars, and a team who sells cars is organized in which way? (Select the best answer) A. By customer B. By location C. By process D. By product
Answers (1)
For accounting errors, which of the below sentences is true? a. They are primarily caused by lack of training. b. They are problems caused by failures in systems, procedures, and policies. c.
Answers (1)
Which type of writing is most commonly used in the field of information technology? A. Technical writing B. Creative writing C. Essay writing D. Proposal writing
Answers (1)
A stock had returns of 21.70% (1 year ago), 2.40% (2 years ago), X (3 years ago), and ‑14.60% (4 years ago) in each of the past 4 years. Over the past 4 years, the geometric average annual return for the stock was 2.85%.
Answers (1)
A Six sigma (6s) approach to quality focuses on preventing defects by using customer feedback to reduce variation and waste. Group of answer choices True False
Answers (1)
Home » Business » Grey Corporation has $100,000 of accounts receivable on December 31. The unadjusted balance of its Allowance for Doubtful Accounts is a credit of $1,000. Experience suggests 5 percent of its receivables will be uncollectible.
Sign Up Forgot Password?